On May 27, 2025, the European Union formally approved a €150 billion loan scheme under the Security Action for Europe (SAFE) initiative. This program aims to bolster EU defense capabilities amid concerns over potential Russian aggression and uncertainties regarding U.S. security commitments. The decision was finalized in Brussels, with 26 of the 27 member states voting in favor and Hungary abstaining .
Key Features of the SAFE Loan Scheme:
- Joint Procurement and Funding: The loans will support collaborative defense projects, including air and missile defense systems, drones, and cyber capabilities. A stipulation requires that at least 65% of the project value be sourced from EU member states, the European Economic Area, or Ukraine .
- Fiscal Flexibility: The initiative includes measures to relax EU budget rules, allowing member states to increase defense spending without breaching fiscal constraints. This flexibility is expected to unlock up to €800 billion for defense investments over the coming years .
- Strategic Autonomy: The program is part of a broader effort to enhance Europe’s strategic autonomy by reducing reliance on external powers, particularly the United States, for defense and security matters .
The SAFE scheme is a central component of the EU’s “ReArm Europe” strategy, which seeks to modernize and strengthen the continent’s defense infrastructure in response to evolving geopolitical threats. While the initiative has received broad support, it also highlights ongoing debates within the EU regarding defense spending priorities and the balance between national sovereignty and collective security commitments.