Overview

• Ministers from 26 of the EU’s 27 member states finalized the SAFE program in Brussels, with Hungary abstaining from the vote.
• SAFE will leverage the EU’s triple-A credit rating to borrow €150 billion and provide member states with loans for coordinated defense projects.
• To qualify for funding, at least 65% of each project’s value must come from firms in the EU, the European Economic Area or Ukraine, while 35% may involve external partners under Security and Defence Partnerships.
• Loans under SAFE feature maturities of up to 45 years and a 10-year grace period, though several fiscally constrained governments have flagged concerns over long-term budgetary impacts.
• The initiative is part of a wider EU package that includes easing budget rules, potentially unlocking up to €800 billion in aggregated defense spending.