EU Greenlights First €38bn Defence Investments Under SAFE Programme

The European Union has formally approved €38 billion in defence investment plans submitted by eight member states, marking the first major disbursement under the bloc’s €150 billion Security Action for Europe (SAFE) scheme. The decision represents a significant step in the EU’s effort to accelerate defence readiness amid heightened geopolitical tensions.

Eight Member States Receive Initial Approval

Defence ministers endorsed national investment plans from Belgium, Bulgaria, Denmark, Spain, Croatia, Cyprus, Portugal, and Romania. These plans, collectively valued at €38 billion, were the first among 19 applications to receive Commission backing in mid‑January. With ministerial approval now secured, the European Commission can proceed to conclude loan agreements and release pre‑financing payments—up to 15% of each country’s requested amount.

Cyprus Defence Minister Vasilis Palmas, whose country currently holds the rotating presidency of the Council of the EU, emphasised the significance of the milestone:
“Today’s decisions show that the EU is not only talking about defence – we are delivering. Through SAFE, we are strengthening our security where it matters the most.”

More Approvals Expected in February

A further eight national plans—submitted by Estonia, Greece, Italy, Latvia, Lithuania, Poland, Slovakia, and Finland—were approved by the Commission in late January and are valued at €74 billion. These are expected to receive final ministerial approval on February 17 during a meeting of EU economy ministers in Brussels.

Three countries—Czechia, France, and Hungary—are still awaiting Commission approval for their proposals, which together exceed €34 billion. A Commission spokesperson declined to provide a timeline for their assessment.

What are the SAFE Scheme Funds

SAFE is a central pillar of the EU’s Readiness 2030 plan, designed to unlock up to €800 billion in defence spending by the end of the decade. The scheme provides long‑maturity, competitively priced loans to member states to accelerate procurement of priority defence capabilities.

Eligible categories include:

• Ammunition and missiles
• Artillery systems
• Drones and anti‑drone systems
• Air and missile defence
• Cybersecurity and AI technologies
• Electronic warfare systems
• Protection of critical and space infrastructure

A key requirement mandates that equipment procured must be predominantly European-made, with no more than 35% of component costs sourced from outside the EU, EEA‑EFTA, or Ukraine.

Canada to Join as First Non‑EU Participant

In a parallel development, EU defence ministers also agreed to authorise a bilateral agreement with Canada, enabling Canadian companies and products to participate in procurement under SAFE. Once ratified by the European Parliament, Canada will become the first non‑European country to take part in the loan‑based defence initiative.

Oversubscription Signals Strong Demand

SAFE has already proven highly popular among member states. The initial call for applications was oversubscribed, with 19 countries requesting more than €150 billion in total—exceeding the scheme’s current envelope. European Commission President Ursula von der Leyen has previously indicated that the programme may be expanded in response to demand.