European Union member states have reached a preliminary agreement on the formation of a 150 billion euro fund to finance defence spending, Bloomberg and Reuters reported, citing diplomatic sources. The initiative is called Security Action for Europe (SAFE) and will be an important measure to strengthen Europe’s defence capabilities against the backdrop of changing global security.
According to Bloomberg, official approval of the fund is expected in the coming days. The funding is expected to be organised by the European Commission through capital market borrowing. Funds from the fund will be provided to EU countries in the form of loans for the implementation of specific defence projects. The focus will be on key areas, including the production of missiles for air defence systems and other components critical to the region’s security.
A special feature of the SAFE fund will be its openness to non-EU states. An agreement has already been reached for the UK to join the project. In addition to this, according to Reuters, there will also be finance available for projects in Ukraine, predominantly for those that assist in improving its defence capability as well as supporting the growth of the European defence sector.
The creation of the SAFE fund is seen as the EU’s strategic response to the uncertainty in transatlantic relations triggered by statements by the US administration of President Donald Trump about a possible reduced US engagement in maintaining European security. In the context of rising geopolitical tensions, the EU wishes to take more responsibility for its own security and demonstrate its readiness to act autonomously in the field of defence.
