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The national defense investment plans of eight more European member states worth about half of the Commission’s defense loan scheme were approved by finance ministers on Tuesday.
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The plans by Estonia, Greece, Italy, Latvia, Lithuania, Poland, Slovakia and Finland are collectively worth €74 billion, half of the €150 billion made available via the Security Action for Europe (SAFE) financial instrument. Poland alone had asked for over €43 billion.
“These implementing decisions will pave the way for affordable, long-term loans to be released by the Commission under the SAFE instrument, demonstrating that the EU is delivering when it comes to defense,” a spokesman for the Cypriot presidency of the Council of the European Union said.
This approval follows the green light given last week by defense ministers to a first batch of plans from Belgium, Bulgaria, Denmark, Spain, Croatia, Cyprus, Portugal and Romania which together are worth €38 billion.
A total of 19 member statesapplied for financial assistance under SAFE. Czechia, France, and Hungary are still awaiting the Commission’s approval, which is required before they can present their plans to ministers for the final green light; that in turn will allow the EU executive to conclude loan agreements with them and proceed with the disbursement of pre-financing payments, which can be as high as 15% of the funds they asked for.
Further tranches will be released based on regular updates that member states will have to provide to the EU executive.
Defending Europe
SAFE, which is part of the Commission’s Readiness 2030 plan to unleash up to €800 billion into defense before the end of the decade, is meant to boost the procurement of priority defense products.
These include ammunition and missiles, artillery systems, drones and anti-drone systems as well as air and missile defense systems, critical infrastructure protection, space asset protection, cybersecurity, AI technology and electronic warfare systems.
An important criterion of the scheme is that the equipment purchased must be European-made, with no more than 35% of component costs originating from outside the EU, EEA-EFTA, or Ukraine.
The scheme is designed to be advantageous to member states whose credit rating is not as good as the Commission’s, meaning they will secure better rates.
Commission President Ursula von der Leyen said late last year that the popularity of the scheme among member states – it was oversubscribed, with the 19 participating countries initially asking for more than €150 billion – could see it expanded further.