© depositphotos/Ruletkka The EU is exploring the possibility of additional loans for the purchase of weapons.
The European Union is weighing up fresh alternatives for financing defense once the current 150 billion euro lending scheme, known as SAFE, has been used up, according to individuals familiar with ongoing discussions.
The strategy entailed the Commission securing capital through financial markets and then allocating it as loans to nations for acquiring specific items the continent needs, such as missiles, ground-based vehicles, and missile defense technology.
Insiders say that deliberations are at a preliminary point, considering the European Commission, which serves as the EU’s executive branch, is still in the process of disbursing funds from the existing lending initiative. It is also anticipated by officials that a few billion will remain unspent in the fund owing to differences between nations’ requests and the definitive agreements, Bloomberg reported.
At present, the EU executive body is providing funds through long-term, low-interest credit lines. Recently, the Commission has given the go-ahead to proposals from 19 countries, with additional approvals anticipated.
“The Commission is currently reviewing the remaining SAFE national plans of the remaining three member states. We will not speculate at this moment regarding a potential second SAFE fund,” stated Commission spokesman Thomas Rainier.
Sources have added that once the funding is depleted this spring, the Commission will assess the entire process and evaluate the viability of a subsequent funding phase, which might potentially feature a follow-up lending program.
The news agency observes that these talks highlight the EU’s ambition to swiftly bolster domestic defense manufacturing to shield against Russian aggression, alongside US President Donald Trump’s intention to curtail US security obligations within Europe.
To reiterate, UK Prime Minister Keir Starmer has formally affirmed London’s intention to participate in the European Union’s substantial defense fund, totaling 150 billion euros. Starmer underscored that tighter collaboration among EU member states and other European nations is vital for collective security.