How EU's SAFE Initiative Will Support Defence Procurement
The Council of the European Union has endorsed the SAFE (Security Action for Europe) initiative, aiming to fortify EU member states' defence capabilities through targeted financial support. Instituted in May, the programme underpins urgent and extensive investments, enhancing Europe's industrial readiness and addressing essential capability shortcomings.
SAFE is set to offer up to €150bn in loans with favourable terms, allowing member states to enhance their defence capabilities precisely when such capacities are crucial.
Expressing enthusiasm on BlueSky, Andrius Kubilius, EU Commissioner for Defence and Space, said: "Delighted to see big interest of EU Member States in SAFE loans. Up to €150bn will reach European defence industry and contribute to ramping up European defence readiness."
"This is a major step towards achieving our defence goals quickly and decisively."
Commonly coordinated procurement approach
In a bid to maximise effectiveness and minimise fragmentation, SAFE projects follow a common procurement strategy. This involves collaborative participation between at least one member state benefiting from SAFE, alongside Ukraine and EEA-EFTA countries.
Nevertheless, to manage the pressing geopolitical climate, SAFE temporarily supports individual member state procurements, ensuring swift acquisition of crucial assets.
The EU's borrowing powers will facilitate these competitively-priced, structured loans, leveraging the union's strong credit rating, thus making these investments more attractive for participating member states.
SAFE's initiative aligns with the European Council's March 2025 objectives, forming the foundational pillar of the European Commission's ReArm Europe Plan/Readiness 2030, potentially unlocking over €800bn in EU defence spending.
This initiative augments ongoing EU strategies by:
- Enhancing national defence allocations with Stability and Growth Pact flexibility;
- Paving pathways for defence-related funding through EU cohesion and regional channels;
- Attracting support from the European Investment Bank;
- Engaging private capital for strategic defence pursuits.
Categorised prioritisation in procurement
SAFE targets defence product procurement across two primary categories. Within both, procurement agreements must ensure that a maximum of 35% of component expenses are sourced outside the EU, EEA-EFTA or Ukraine.
- Ammunition and missiles
- Artillery systems, including deep precision strike capabilities
- Ground combat capabilities and their support systems, including soldier equipment and infantry weapons
- Small drones (NATO class 1) and related anti-drone systems
- Critical infrastructure protection
- Cyber
- Military mobility including counter-mobility
Moreover, Category Two undertakings must satisfy stricter eligibility norms, requiring contractors to maintain capability for equipment modification without non-EU constraints.
Nineteen Member States have expressed interest in utilising the SAFE loans: Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Hungary, Poland, Portugal, Romania, Slovakia and Finland.
- Air and missile defence systems
- Maritime surface and underwater capabilities
- Drones other than small drones (NATO class 2 and 3) and related anti-drone systems
- Strategic enablers such as, but not limited to, strategic airlift, air-to-air refuelling, C4ISTAR systems as well as space assets and services
- Space assets protection
- Artificial intelligence and electronic warfare
Establishing defence partnerships
SAFE represents a pivotal shift in EU collaboration with key third countries. From the outset, Ukraine and EEA-EFTA nations will engage on a par with EU states, holding eligibility for collective procurement and their defence sector engagements.
Although solely Member States can access SAFE loans, other nations partaking in joint procurement include EU acceding, candidate and potential candidate countries, alongside nations with EU Security and Defence Partnerships, such as Albania, Canada, Japan, Moldova, North Macedonia, Norway, South Korea and the United Kingdom.
Additional arrangements might be enacted to broaden participation and eligibility.
Initiated from 29 May with its publication in the Official Journal of the European Union, SAFE enables Member States to submit national plans for fund access, aligning procurement projects with EU aims.
Once proposal submissions commence, the commission will evaluate and assess initial National Defence Investment Plans, with loan negotiations and operational arrangements anticipated by February 2026.
