IRIA News

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Eighteen European Union member states have signaled interest in securing approximately €127 billion ($146 billion) in EU-backed loans aimed at strengthening defense procurement, the European Commission announced on July 30, 2025.

Countries including Italy, Poland, Spain, and France submitted preliminary expressions of interest under the Security Action for Europe (SAFE) financial instrument. SAFE is part of a broader EU initiative to scale up defense investments.

First unveiled in March this year, the program offers up to $173 billion in long-term, competitively priced loans for member states seeking to upgrade their military capabilities in response to mounting geopolitical tensions.

“Delighted to see big interest of EU member states in SAFE loans,” said EU Commissioner for Defense and Space Andrius Kubilius in a social media post. “This is a major step towards achieving our defense goals quickly and decisively.”

Preparing for capital market funding

The preliminary interest shown by EU countries allows the Commission to begin assessing demand and preparing to raise funds on the capital markets. Countries interested in participating are expected to formally submit loan requests and national defense investment plans by the end of November.

United, ambitious, European security and defence 💪

18 European countries have expressed interest in loans under the Security Action for Europe (SAFE) instrument, expected to mobilise up to €150 billion in investment ⬇️ pic.twitter.com/0AuiNnb7Q8

— European Commission (@EU_Commission) July 30, 2025

According to the Commission, the SAFE loans are intended to support “urgent and large-scale procurement efforts” and will primarily focus on joint acquisitions. Eligible projects must involve at least one EU member state benefiting from SAFE, along with another EU country, Ukraine, or members of the EEA-EFTA bloc, namely Iceland, Liechtenstein, and Norway.

Temporary support for national efforts

Although joint procurement remains the core principle behind the SAFE initiative, the Commission acknowledged the shifting security landscape in Europe. As a result, SAFE will temporarily allow individual countries to use the loans for national procurement efforts, provided the equipment is deemed critical and urgently needed.

This flexibility reflects Europe’s growing concern over the war in Ukraine and increasing instability in neighboring regions, which have accelerated the need for fast and coordinated defense spending.

Participation rules and procurement criteria

While only EU member states can obtain SAFE loans, the Commission confirmed that countries with existing security and defense partnerships with the EU may still participate in joint procurement projects. These partner countries include the United Kingdom, Norway, Canada, South Korea, and Japan.

Eligibility rules for procurement under SAFE also require that no more than 35% of component costs originate from outside the EU, Ukraine, or EEA-EFTA countries. This measure is intended to reduce dependence on external suppliers and strengthen internal European defense supply chains.

For high-priority defense systems, such as air and missile defense platforms, maritime capabilities, and strategic enablers like air-to-air refueling, the requirements are even stricter. Contractors must guarantee the ability to modify and adapt equipment independently, without being subject to restrictions from non-EU entities.

Strategic step toward defense autonomy

The SAFE initiative is part of the EU’s larger effort to promote greater strategic autonomy in defense and security matters, as Europe confronts new challenges to its borders and international order.

With defense industries under strain and countries seeking faster procurement cycles, the loan program aims to inject fresh capital and coordination into a fragmented European defense sector.

While the $146 billion in initial interest falls slightly short of the $173 billion total available, Commission officials see this as an encouraging sign of momentum.

The final list of approved projects and disbursed loan amounts will depend on the November submissions and subsequent evaluation by the Commission.