The member states (at ambassadorial level) have reached an initial agreement on the new financial tool SAFE, which will provide funds amounting to €150 billion in loans for joint investments in European defense. The Polish presidency of the EU Council hailed this agreement as a “great success” for our security, which is “the main priority,” noting that the compromise was achieved after “difficult negotiations” lasting two months. The final regulation text will not be released to the public before its final approval by the General Affairs Council meeting on May 27 in Brussels. The EU’s financial tool, SAFE, will offer low-interest multi-year loans of up to €150 billion for defense, guaranteed by the EU budget. These loans will fund joint purchases and equipment projects in areas where European supply remains insufficient, such as missile production, ammunition, unmanned aircraft, and anti-aircraft defense systems. Countries outside the EU, like Norway and Ukraine, with signed defense partnerships, and the UK, which signed a similar partnership agreement with the EU on May 19 in London, may also participate. In the draft regulation under approval, it is stipulated that the cost of components produced by the European defense industry must not be less than 65% of the total cost of the final military equipment. The remaining percentage, up to 35%, can come from countries outside the EU, EEA/EFTA countries, or Ukraine. It is noted that Turkey’s participation, like all other candidate countries, requires a different type of agreement approved by the Council. SAFE is part of a broader rearmament program for Europe, ‘ReArm Europe,’ presented at the end of March by the European Commission, aiming to mobilize up to €800 billion.
EU Reaches First Agreement on New €150 Billion Defense Fund
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