Eighteen countries have signed up to avail of €127 billion in loans from the European Commission to spend on defense – with Ukraine’s allies in the bloc saying they will use the funds to deliver weapons to that country.
In what Politico described as a “major win for the Commission”, the following countries expressed interest in the Security Assistance Facility for Europe (SAFE) loans-for-arms scheme, which has can provide up to €150 billion in low-interest loanns: Belgium, Bulgaria, Cyprus, Czech Republic, Estonia, Spain, Finland, Hungary and Lithuania, Slovakia, Latvia, Croatia, Poland, Greece, Portugal, Romania, France and Italy.
“Delighted to see big interest of EU member states in SAFE loans,” EU Commissioner for Defence and Space Andrius Kubilius said. “This is a major step towards achieving our defense goals quickly and decisively.”
As proposed in the ReArm Europe Plan / Readiness 2030, the Commission will raise up to €150 billion on the capital markets, providing financial levers to EU Member States to ramp up the investments in key defence areas like air missile defence, drones, or strategic enablers.
Last May, Ursula von der Leyen, President of the European Commission said that SAFE was a “critical step forward”.
“Europe must now assume a greater share of responsibility for its own security and defence. With SAFE, we are not only investing in cutting-edge capabilities for our Union, for Ukraine, and for the entire continent; we are also strengthening the European defence technological and industrial base.”
She said that the fund also sought to create “a truly European market for defence”. The Commission said its ReArm Europe program “aims to reduce the bloc’s decades-long military dependence on the United States.”
The plan envisages that when countries jointly buy weapons through SAFE a lower price can be secured, and the cheap loans can be paid back over a 45-year timeframe.
However, last month, the European Parliament’s legal affairs (JURI) committee recommended that the institution takes the EU Commission to court for bypassing MEPs to set up the SAFE fund. “The motion was approved in a secret vote with 19 out of 23 votes in favour, a member of the committee confirmed to Euronews.”