EU's SAFE defence loan programme faces oversubscription

Loan applications from 18 EU countries under the European Commission's SAFE defence programme have already surpassed the programme’s €150 billion lending limit, according to multiple sources cited by Euractiv.

As of July 30, the European Commission had received expressions of interest totalling €127 billion. However, insiders suggest this figure represents only the lower end of the requests. Under the SAFE framework, countries are required to submit both minimum and maximum bids. Sources familiar with the figures told Euractiv that the upper end of the submissions far exceeds the programme’s total financial envelope, Caliber.Az reports. 

“The outcome of the requests comes well above the €150 billion limit,” a source with direct knowledge of the matter confirmed.

Launched in March, the SAFE programme is designed as the financing arm of the EU’s broader strategy to bolster the European defence industry. Its goal is to increase the production of military equipment and ammunition, and to replenish dwindling national stockpiles as part of efforts to “rearm” Europe.

The Commission will now face the challenge of allocating the €150 billion budget among participating member states. The oversubscription is a marked turnaround from just a few weeks ago, when officials feared the programme might be undersubscribed and had planned to reopen applications next year to distribute any remaining funds.

Despite the current demand exceeding available funds, the Commission is still encouraging broader participation. In a letter sent on August 1, EU officials urged the nine remaining member states that have not yet submitted bids to do so by the end of summer — months ahead of the official November deadline.

By that date, all EU capitals are expected to present both their minimum and maximum loan requests, along with detailed plans for the military hardware they intend to procure through the SAFE initiative.

By Sabina Mammadli