The EU Council has agreed the setting up of the Security for Action for Europe Instrument to support EU states to invest in defence industrial production through common procurement.
The Security Action for Europe (SAFE) instrument will finance urgent and large-scale investments in the European defence technological and industrial base (EDTIB). The aim is to boost production capacity, making sure defence equipment is available when needed, and to address existing capability gaps – ultimately strengthening the EU’s overall defence readiness.
SAFE will also allow the EU to further support Ukraine by associating its defence industry to the instrument from the start.
“We have adopted the first large-scale defence investment programme on the EU level worth €150 billion,” said Polish minister Adam Szlapka, for the EU presidency: ” This is unprecedented instrument which will boost our defence capabilities and support our defence industry. The more we invest in our security and defence, the better we deter those who wish us harm.”
Through SAFE the EU will provide up to €150 billion that will be disbursed to interested member states upon demand, and on the basis of national plans. The disbursements will take the form of competitively priced long-maturity loans, to be repaid by the beneficiary member states.
To ensure economies of scale and interoperability, and reduce possible fragmentation of the EDTIB, beneficiary member states will have to carry out, in principle, common procurements involving at least two participating countries to qualify for the loans.
In response to current geopolitical situation and urgent need for massive investment in defence equipment, SAFE will also allow procurement involving only one member state for a limited period of time.
SAFE opens up a new chapter in the cooperation with third countries. Ukraine and EEA-EFTA countries will be treated on the same terms as member states. Not only they will be able to join common procurements, but also it will be possible to buy from their industries.
SAFE will also allow acceding countries, candidate countries, potential candidates and countries that have signed a Security and Defence Partnerships with the EU, such as the United Kingdom, to join common procurements.
The eligible activities financed through SAFE will be divided into two categories of defence products:
1) ammunition and missiles; artillery systems, including deep precision strike capabilities; ground combat capabilities and their support systems, including soldier equipment and infantry weapons; critical infrastructure protection; cyber; military mobility including counter-mobility;
2) air and missile defence systems; maritime surface and underwater capabilities; drones and anti-drone systems; strategic enablers, such as, but not limited to, strategic airlift, air-to-air refuelling and C4ISTAR systems as well as space assets and services; space assets protection; artificial intelligence and electronic warfare.
Defence products belonging to category 2 will be subject to stricter eligibility conditions, requiring for the contractors to have the ability to decide on the definition, adaptation and evolution of the design of the defence product procured.
For both categories of the products, procurement contracts will have to ensure that the cost of the components originating outside the EU, EEA-EFTA states and Ukraine is not higher than 35 % of the estimated cost of the components of the end-product.
Questions and answers on ReArm Europe Plan/Readiness 2030 (European Commission website) Europe
