Three member states that have asked for funding under SAFE have yet to have their national plans greenlit by the European Commission, the first of two required steps.
European Union defence ministers on Wednesday approved the national investment plans of eight member states, paving the way for the first disbursements under the bloc's €150 billion Security Action for Europe (SAFE) scheme.
The plans by Belgium, Bulgaria, Denmark, Spain, Croatia, Cyprus, Portugal and Romania are together worth €38 billion.
"Today’s decisions show that the EU is not only talking about defence – we are delivering. Through SAFE, we are strengthening our security where it matters the most," said Vasilis Palmas, minister of defence of Cyprus, which currently holds the presidency of the Council of the EU.
The eight countries were the first of the 19 member states that applied for financial assistance under SAFE to have their defence investment plans backed by the Commission in mid-January.
The approval by ministers now allows the Commission to conclude loan agreements with them and proceed with the disbursement of the pre-financing payments, which can be as high as 15% of the funds they asked for. Further tranches will be released based on regular updates member states will have to provide to the EU executive.
Another eight national plans collectively worth €74 billion, submitted by Estonia, Greece, Italy, Latvia, Lithuania, Poland, Slovakia and Finland, were approved by the EU executive in late January. The final green light for those is expected on 17 February at a meeting of economy ministers in Brussels.
The national investment plans of Czechia, France, and Hungary are still pending. A Commission spokesperson said that "they would not speculate on the timeline".
Ready for 2030
SAFE, which is part of the Commission's Readiness 2030 plan to unleash up to €800 billion into defence before the end of the decade, is meant to boost the procurement of priority defence products.
These include ammunition and missiles, artillery systems, drones and anti-drone systems as well as air and missile defence systems, critical infrastructure protection, space asset protection, cybersecurity, AI technology and electronic warfare systems.
An important criterion of the scheme is that the equipment purchased must be European-made, with no more than 35% of component costs originating from outside the EU, EEA-EFTA, or Ukraine.
The scheme is designed to be advantageous to member states whose credit rating is not as good as the Commission's, meaning they will secure better rates.
The Commission has yet to approve the national plans of France, the Czech Republic and Hungary, which together are worth a little over €34 billion. Germany did not ask for any SAFE funds.
Commission President Ursula von der Leyen said late last year that the popularity of the scheme among member states – it was oversubscribed, with the 19 participating countries initially asking for more than €150 billion – could see it expanded further.
Defence ministers also decided on Wednesday to authorise the EU to sign a bilateral agreement with Canada on the participation of Canadian companies and products originating from Canada in procurement under the SAFE instrument. This makes Canada the first non-European country to participate in the loan for defence scheme.
The agreement will be formally concluded after the European Parliament also gives its consent.