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21h ago

EU Approves €150 Billion SAFE Loan Scheme to Reinforce Defence Industry

The programme requires at least 65 percent of procurement spending to go to European companies as part of a push for strategic autonomy.

The flag of the European Union and Ukraine's national flag fly at a building in Bern, Switzerland September 19, 2022. REUTERS/Arnd Wiegmann/File Photo
The Eurofighter EF-2000 Typhoon of the Luftwaffe (German Air Force) takes off from Los Llanos military air base during the Tactical Leadership Programme in Albacete, Spain, on November 21, 2024. (Photo by Joan Valls/Urbanandsport /NurPhoto)
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The SAFE borrowing scheme backed by the EU's central budget was proposed by Brussels in March as the bloc rushes to boost its defences

Overview

  • Twenty-six member states endorsed the SAFE scheme in Brussels with Hungary abstaining.
  • SAFE will channel €150 billion in EU loans into joint defence projects to strengthen military capabilities.
  • Projects must allocate at least 65 percent of procurement value to companies within the EU to qualify for funding.
  • The scheme permits up to 35 percent of procurement value from non-EU and non-Ukrainian suppliers and could admit British companies under a recent UK-EU defence partnership.
  • As part of a broader package that could mobilise up to €800 billion, the initiative addresses concerns over Russian threats and U.S. security commitments.