Everything you need to know about SAFE, the EU’s €150bn defence instrument
The European Union has taken a major step toward enhancing its defence capabilities by approving a €150 billion loan programme, SAFE, aimed at boosting domestic arms production. The initiative includes a 65% European production requirement to qualify for funding, ensuring most of the weapon systems’ value originates within the EU, Ukraine, or specific partner countries. SAFE aims to address the EU’s defence vulnerabilities exposed by the war in Ukraine and potential shifts in US military support. With long-term, VAT-exempt loans backed by the EU budget and favourable conditions, the programme seeks to incentivise collaborative defence procurement among member states. It also introduces safeguards like EU design authority over foreign components to prevent external control over military systems. The scheme is part of the broader 'Readiness 2030' strategy and is expected to be formally adopted on 27 May, with several countries already showing strong interest in participating.