European Commission gives initial approval for SAFE funding, with up to €800 billion mobilized to modernize EU defense. Full analysis.
Summary
The European Commission has approved the first set of national defense plans from eight Member States under the Security Action for Europe (SAFE) instrument, a central component of the ReArm Europe / Readiness 2030 strategy aimed at mobilizing up to €800 billion to strengthen the Union’s collective security. This funding is to take the form of low-cost long-term loans—up to €150 billion under the SAFE framework—intended to accelerate the acquisition of critical capabilities such as air defense systems, drones, and cybersecurity. The first wave of funding approved for Belgium, Bulgaria, Denmark, Spain, Croatia, Cyprus, Portugal, and Romania represents approximately €38 billion once the loan agreements are signed. This step, which still requires formal approval by the EU Council, marks a major advance in building a more integrated and resilient European defense capability in the face of current geopolitical challenges.
The strategic framework for the European decision
The Commission’s agreement is part of the broader context of the ReArm Europe / Readiness 2030 plan, unveiled in March 2025 at the instigation of Commission President Ursula von der Leyen. This strategic plan aims to respond to a new geopolitical situation marked by a perceived fragility in European security, particularly due to the war in Ukraine and the partial disengagement of certain traditional allies. The overall objective is to mobilize up to €800 billion in public and private investment for defense by the end of the decade, in order to reduce capability gaps and strengthen the European defense industry.
At the heart of this plan is the Security Action for Europe (SAFE) instrument, adopted by the Council of the European Union on May 27, 2025. SAFE stands out as a mechanism for long-term, low-cost structured loans provided by the European Union at the request of Member States to finance large-scale defense projects. This mechanism aims to encourage joint procurement and optimize European production capabilities in strategic areas.
Financial approach and financing mechanism
Unlike other support instruments, SAFE is not a grant fund, but rather a repayable loan facility. The European Commission will borrow on the financial markets thanks to the EU’s strong credit rating and then lend these funds to Member States according to their national investment plans. These loans are designed to be competitive, with favorable terms that ease the financial burden on beneficiary countries.
The SAFE envelope amounts to €150 billion: this is the part of the overall €800 billion plan specifically dedicated to financing defense capability purchases through European loans. This amount is not fixed per beneficiary: it is the Member States, through their national plans assessed by the Commission, that decide how much they wish to request based on their needs.
The funds raised will be allocated to essential expenditure such as:
- the purchase of air defense and missile defense systems,
- drones and unmanned vehicles,
- cybersecurity and command and control capabilities,
- strengthening logistical and industrial infrastructure.
This cooperative approach aims to reduce duplication, lower unit costs, and promote the interoperability of European forces.
Approval of the first wave: who benefits from the funding?
On January 15, 2026, the European Commission approved the national defense plans of eight Member States: Belgium, Bulgaria, Denmark, Spain, Croatia, Cyprus, Portugal, and Romania. This approval constitutes the first wave of SAFE fund deployment.
The estimated amounts of funding granted to these countries vary greatly:
- Romania: approximately €16.68 billion.
- Belgium: approximately €8.3 billion.
- Cyprus: approximately €1.18 billion.
- The other beneficiaries will receive lower or varying amounts depending on their specific needs, with Denmark receiving the smallest amount, around several tens of millions.
Once the loan agreements have been signed, this first series will provide the eight states with approximately €38 billion to accelerate their priority defense investments.
Who actually finances SAFE and how?
SAFE funds come from loans taken out by the European Commission on the capital markets, which means that the EU incurs debt on behalf of the Union. These loans are guaranteed by the EU budget, which reassures investors and allows for favorable interest rates. The beneficiary Member States then repay these loans according to agreed terms, usually over the long term with grace periods before repayment.
The repayment of these loans will theoretically fall to the beneficiary Member States, but the European Union acts as a financial facilitator: it pools the risk and allows countries with weaker finances to access borrowing costs that they would not have been able to obtain on their own. This is one of the Commission’s main arguments: using the strength of the Union to reduce defense costs for all participating members.
Why SAFE is strategic for the European Union
The importance of SAFE goes beyond simple financing. It is a tool for the strategic integration of European defense. By facilitating joint procurement, SAFE contributes to better coordination between Member States and more efficient use of the European defense industrial base.
The challenge is twofold:
- Strengthening European strategic sovereignty by reducing dependence on external suppliers.
- Increasing collective response capacity to regional or global threats, whether in terms of force projection or cyber defense.
In a context where some intelligence services believe that the threat of conflict on European territory remains significant, these measures are seen as essential to deter any future aggression and secure the EU’s borders in the long term.
What this first wave means for the future
The approval of the first series of SAFE funding is only the beginning. Other Member States have submitted their national plans and are still awaiting approval. In total, 19 countries have already expressed interest in SAFE, with overall plans potentially much higher than the initial amount.
The final decision by the Council of the European Union, expected in the weeks following the Commission’s approval, will pave the way for the signing of loan agreements and the first disbursements as early as March 2026.
Sources
European Commission – SAFE instrument description, ReArm Europe, SAFE financing
European Commission press releases – first wave of SAFE approvals
Euronews, coverage of SAFE defense funding approval
StockWatch, reporting on expected disbursements
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