On Wednesday, May 21st, the European Union member states agreed to mobilise €150 billion in loans for joint defence investments, marking the first tangible step in the ReArm Europe project promoted by the European Commission.
The measure, adopted at ambassador level and pending ministerial ratification, represents a historic turning point in Brussels’ role as a military and financial actor. It marks the beginning of a new phase in which security and the arms industry will become central pillars of the European project.
The instrument, SAFE (Security Action For Europe), will be funded through the issuance of joint debt backed by the Union itself. Through this mechanism, countries that request access will jointly receive repayable loans to purchase military equipment.
The final version of the agreement rules out granting any part of these resources in the form of subsidies, meaning all the funds must be repaid, potentially increasing member state indebtedness in the medium term.
Although the fund is presented as a response to growing defence needs in an unstable geopolitical context, it is part of a broader strategy promoted by the Commission that also includes loosening fiscal rules. Governments can spend an additional 1.5% of GDP over the next four years without risking sanctions for excessive deficit.
In practice, this is a fast-tracked method to fund rearmament without bureaucratic obstacles or significant parliamentary oversight—in other words, bypassing checks and balances that should exist, especially for operations of this scale. Brussels does not want anyone to question its plans, much less put roadblocks in the way.
But the scale of the operation contrasts sharply with the opacity of the process. There has been no genuine public debate about the ultimate goals of this rearmament, nor any clear explanation of how the use of these funds will be assessed or what strategic impact they are expected to achieve.
One of the most debated aspects of the agreement has been the “European preference” clause, which requires at least 65% of the components of any purchased product to come from companies based in the EU, Ukraine, or the European Economic Area. This provision aims to strengthen the bloc’s defence industry and reduce dependence on third countries, particularly the United States, whose companies will be limited to supplying no more than 35% of the products acquired with these funds. The intent is clear: to favour European production without fully closing the door to external suppliers. What they fail to mention, however, is that significant U.S. investment funds like BlackRock partially own many major European arms manufacturers.
Access to the programme will not be limited exclusively to EU member states. Joint purchases will also be open to third countries with existing security and defence agreements with the EU, or those in the process of accession. These include Norway, Moldova, Japan, South Korea, North Macedonia, Albania—and most recently, the UK, as British PM Keir Starmer also agreed to align his country’s foreign policy with Brussels’ in exchange for participation earlier this week. On the other hand, the U.S. is unlikely to ever sign such an agreement, so American manufacturers will miss out on most of these massive joint procurement projects as a result.
As for the types of products eligible under the SAFE instrument, two major categories are defined. The first includes ammunition and missiles, artillery systems, ground combat capabilities, small drones, critical infrastructure protection, cybersecurity, and military logistics. The second focuses on air and missile defence systems, maritime capabilities—surface and underwater—larger drones, electronic warfare, artificial intelligence, and command, control, and intelligence systems.
