On Tuesday 27 May, the Council of the European Union formally adopted the regulation establishing the ‘SAFE’ instrument, which will grant loans of up to €150 billion to Member States wishing to increase their military spending (see EUROPE 13645/28, 13642/3).
“We have adopted the first large-scale defence investment programme (...). This is not only a success for the [Polish] Presidency, but for the EU as a whole”, said Polish Minister for European Affairs Adam Szłapka.
All Member States supported the proposed regulation, with Hungary being the only Member State to abstain.
EU countries now have six months, following the regulation’s entry into force at the end of May, to submit a request for support accompanied by an investment plan setting out their military equipment requirements.
Third countries, other than EEA/EFTA countries or EU candidate countries, and their defence industries will be able, under certain conditions, to take part in joint purchases of military equipment, provided they have signed specific partnerships and agreements with the EU. This includes South Korea, Japan and the United Kingdom. Eligible expenditures include munitions, drones, air defence, cyber equipment and military mobility.
The European Parliament is expected to challenge before the Court of Justice of the EU the use of the legal basis (Article 122 TFEU) on which the ‘SAFE’ Regulation is based, which has excluded it from the decision-making process. According to our information, the Committee on Legal Affairs will be hearing the case again. When questioned on Tuesday, the European Commission remained convinced that recourse to Article 122 was justified, citing the “exceptional” geopolitical situation in which the EU finds itself.
The ‘SAFE’ Regulation is part of the ‘ReArm Europe’ initiative, which also includes the possibility for Member States to activate the Stability and Growth Pact’s national derogation clause in order to be authorised to increase their military spending by up to 1.5% of national GDP for four years. Loans received via the SAFE instrument can be accounted for in this way.
See the legislative text approved by the Member States: https://aeur.eu/f/gy9 (Original version in French by Mathieu Bion)