EU Council adopts $170 billion loan program for joint defense procurement

The Security Action for Europe (SAFE) instrument, a new EU financial tool, will support member states in investing in defense industrial production through common procurement, the council announced in a statement.

“The aim is to boost production capacity, making sure defense equipment is available when needed, and to address existing capability gaps – ultimately strengthening the EU’s overall defense readiness,” it added.

The council emphasized that the new program will finance urgent and large-scale investments in European defense technology and industry.

“We have adopted the first large-scale defence investment programme on the EU level,” said Adam Szłapka, Polish Minister for the European Union. “The more we invest in our security and defence, the better we deter those who wish us harm.”

Beyond the bloc

The council said the tool will help further support Ukraine in its battle against Russia.

Under the program, Ukraine and European Economic Area members – such as Iceland and Norway – will be treated on the same terms as EU member states.

“Not only will they be able to join common procurements, but it will also be possible to buy from their industries,” the statement said.

Procurement contracts must ensure that the cost of components from these nations does not exceed 35% of the estimated cost.

However, the instrument foresees joint procurement with even more nations.
“SAFE will also allow acceding countries, candidate countries, potential candidates, and countries that have signed Security and Defence Partnerships with the EU, such as the United Kingdom, to join common procurements,” it added.

The council noted that the program could be expanded to other countries through new bilateral or multilateral agreements.