European Union establishes defense fund worth 150 billion euros, granted by member states.
The European Union has greenlighted the European Commission's initiative to establish a €150 billion fund, known as Security Action for Europe (SAFE), aimed at bolstering investments in the defense sector. This decision will formally be officialised following the publication in the EU's official journal, scheduled for May 29, 2025.
The SAFE fund will be financed through joint borrowing and offer loans to EU member states and other nations, including Ukraine, to finance projects geared towards enhancing defense capabilities and stimulating the European defense industry.
According to Adam Szlapka, Poland's Minister for European Affairs, "We have adopted the initial large-scale defense investment program at the EU level. This groundbreaking tool will bolster our defense capacities and support our defense industry. The more we invest in our security and defense, the more effectively we can deter potential threats."
The SAFE fund is part of the broader EU rearmament plan, ReArm Europe, proposed by European Commission President Ursula von der Leyen in March. This comprehensive plan, with an estimated cost of €800 billion, includes measures to ease fiscal rules for increased defense spending of 1.5% and earmarks €650 billion for weapons production.
In 2024, European defense spending amounted to €326 billion, equating to 1.9% of the total GDP. Two-thirds of NATO members met the 2% benchmark for defense spending. Prior to this, US President Donald Trump consistently criticized EU nations for insufficient contributions to NATO and warned of potential US withdrawal from the alliance.
Reports from Reuters suggest that the EU began formulating a strategy to enhance its defense capacities immediately after Trump's re-election, as doubts arose regarding the reliability of American protection.
The SAFE fund is the first significant defense investment program in the EU and represents a significant stride towards European defense sovereignty, though its success hinges on consistent political consensus and effective integration among member states.
The European Commission's SAFE fund, a €150 billion defense investment program, will be financed through joint borrowing and offer loans not only to EU member states but also to nations such as Ukraine, as a means to strengthen defense capabilities and foster the European defense industry. This initiative is part of the broader EU rearmament plan, ReArm Europe, which includes measures to stimulate increased defense spending and weapons production, as well as easing fiscal rules for this purpose.
