Defence has become a top priority for European countries since Russia’s full-scale invasion of Ukraine in 2022. This prompted the European Union to roll out the SAFE initiative to help them better prepare. Here’s what it’s all about.
SAFE stands for Security Action for Europe and was adopted by the European Council in March 2025. It is a new financing initiative meant to help countries accelerate their defence capabilities.
The scheme offers long-term loans and competitive rates, which can be used to fund urgent and critical investments in European defence industries.
SAFE will disburse up to €150 billion in financing over five years up to 2030 and the first wave of applications were approved in January for eight EU countries, including Belgium, Denmark and Spain.
Ten more applications for funding have since been approved and Hungary’s plan is currently under evaluation by the European Commission, because the country actually applied for more cash than it was actually initially allocated.
Poland is set to be the biggest beneficiary, having signed an agreement for around €44bn in SAFE funding. The first €6bn of that was disbursed at the end of May.
The other eight EU members opted not to participate for a variety of reasons, either because they have a good enough credit rating to get loans elsewhere or because they were not comfortable with handing over detailed procurement lists to the EU institutions.
Back in 2025, the United Kingdom was in talks about joining SAFE but an agreement was not possible as the two sides could not compromise on the access fees the UK would have to pay as a now non-EU member.
Eligible investments under SAFE include ammunition, artillery systems, small drones, missile defence systems and cybersecurity measures. Each of these is split into two categories, which have their own special requirements.
No more than 35% of component costs under a procurement contract originate from outside the European Economic Area, which in this programme includes Ukraine as well. This is meant to spur more investments in the European defence industry.
Other requirements for certain technologies include ensuring that contractors are able to modify equipment if needed. This is sometimes not allowed depending on where manufacturers are based.
Earlier this week, the Commission and Ukraine signed a ground-breaking combat drone deal that will aim to combine European industrial production capacity with Ukraine’s battle-tested expertise.
The bulk of the funding for the initiative will come from the €90bn Ukraine loan facility but up to €10 billion in unallocated SAFE funding will also be used.
In Brussels, conversations continue about expanding SAFE further, what will come after 2030 and whether a bigger funding pot for larger-scale defence investments could be created in the future.
