The EU is planning to borrow €150 billion on the financial markets for its new lending instrument Security Action for Europe (SAFE). It is one of the pillars of the Readiness 2030 plan, which aims to mobilise €800 billion for defence investment by the end of the decade.
“Russia’s war in Ukraine and the EU’s attempt to support Kyiv really highlighted the dependencies and shortcomings of the EU’s defence industrial base and how ill-prepared we were in the event of being forced into a conventional war,” said Alice Tidey, a Euronews reporter who covered the announcement.
“SAFE is about firing up European weapons manufacturing lines by getting member states to buy strategically and together so that the industry becomes less fragmented and quicker to produce, and our armies, more crucially, become more interoperable. And of course, also, it’s about putting prices down,” she added.
The investments should boost production and procurement of air and missile defence, artillery systems, missiles and ammunition, as well as other crucial military equipment to deal with security threats, including critical infrastructure protection and cyber, artificial intelligence and electronic warfare.
“It gives countries the possibility to find money to buy military equipment. It’s a beginning and I think it’s very good sign,” said German MEP Marie-Agnes Strack-Zimmermann from the Renew group.
The parliamentarian who chairs the European Parliament’s Security and Defense Committee also highlighted that some of the technology could have dual use and be useful for civilian purposes.
Euronews spoke to residents in Rome and opinions were divided. “We need to defend ourselves and the threat is at our doorstep,” said one . “They shouldn’t increase spending for a war that won’t happen. This is not our war,” said another resident in the Italian capital, referring to Russia’s invasion of Ukraine.
In Berlin, the same divisions were evident: “If the aim is to start another arms race, then I’m not in favour,” said one resident of the German city. “I’m all for a joint European defence effort, but without going into debt,” said another.
Partnerships with like-minded countries
Governments will have to repay over 45 years and they can also activate the Stability and Growth Pact’s National Escape Clause, which stipulates that budget deficits cannot exceed 3% of GDP.
Under SAFE, governments can exceed this figure by 1.5% per year, provided that the amount is spent solely on defence. More than half of member states have requested activation from the European Commission.
To receive loans, governments must meet certain conditions: 65% of the value of each piece of military equipment must be produced in one of the 27 EU member states, Ukraine and the European Free Trade Association (EFTA) members Iceland, Liechtenstein and Norway.
The remaining 35% can also come from any third country in the world. The common procurement can include EU candidate countries, such as the Western Balkans, and third countries with bilateral security and defence partnerships, such as Japan, South Korea and the United Kingdom.
However, the EU remains highly dependent on weapons purchased from the US and the increased investment could be a clear indication of the bloc’s commitment to becoming more autonomous, something that President Donald Trump has demanded in the framework of NATO.
“I’m optimistic that the President of the US will realise what we are now starting to do,” said Strack-Zimmermann.
The EU is planning to raise more funds, with the European Commission proposing to use part of the Cohesion Funds, which are intended for regional development. The European Investment Bank will also try to mobilise private funds for this area for the first time.
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Journalist: Isabel Marques da Silva
Content production: Pilar Montero López
Video production: Zacharia Vigneron
Graphism: Loredana Dumitru
Editorial coordination: Ana Lázaro Bosch and Jeremy Fleming-Jones