ASSESSMENTS

How the EU's SAFE Loans Package Will Reshape Europe's Defense Industry

Aug 5, 2025 | 17:20 GMT

Employees work at a production line as German Chancellor Olaf Scholz and Defence Minister Boris Pistorius attend the groundbreaking ceremony for a new munitions factory of German defense contractor Rheinmetall on Feb. 12, 2024, in Unterluess, Germany.
Employees work at a production line in a new munitions factory of German defense contractor Rheinmetall on Feb. 12, 2024, in Unterluess, Germany.

(Fabian Bimmer - Pool/Getty Images)

The Security Action for Europe (SAFE) loan facility represents the European Union's most immediate and politically viable tool to accelerate rearmament, support joint procurement and strengthen Europe's defense-industrial base amid growing security threats and transatlantic uncertainty, but long-term strategic autonomy goals will ultimately require more ambitious and contentious measures that currently face significant political constraints amid sovereign and fiscal concerns. Eighteen EU member states -- including Belgium, Finland, France, Italy, Poland, Romania, Spain and the three Baltic States -- have applied for SAFE funding to support defense investments and joint procurement across the bloc by the July 30 deadline. Germany, the Netherlands and Sweden are among the countries that decided not to apply, at least in this initial round, though they could still do so ahead of the final deadline for formal applications on Nov. 30. According to the European Commission, governments have submitted preliminary funding requests -- outlining a...

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