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The European Union member states have agreed to launch a €150 billion ($169 billion) defense fund for joint arms procurement, allowing members to borrow from Brussels for weapons systems loans-for-arms fund backed by the bloc's shared budget, according to three officials familiar with the decision who spoke to the Financial Times.
The initiative represents a landmark shift for Brussels in response to Russia's war against Ukraine and U.S. President Donald Trump's demands for Europe to increase spending on its own security.
The political agreement was reached on Monday morning after months of negotiations over spending details, with formal approval expected on Wednesday, officials told the Financial Times.
The fund, officially known as Security Action for Europe (SAFE), was initially proposed by the European Commission in March as a means to accelerate Europe's rearmament efforts. An EU diplomat confirmed to news sources that member countries have "in principle agreed" on the proposals for the €150 billion fund.
The initiative will allow EU countries to borrow directly from Brussels and invest in weapons systems and platforms through joint procurement processes. This cooperative approach aims to enhance efficiency and coordination in European defense spending while strengthening the continent's arms industry.
SAFE will be financed through joint borrowing mechanisms, providing loans not only to EU member states but also to certain other countries, such as Ukraine, for projects that strengthen their defense capabilities and support Europe's arms industry.
The agreement comes after extensive negotiations between member states regarding the specific details of how the borrowed funds can be allocated and spent. By centralizing the borrowing process through Brussels, the program aims to create economies of scale and encourage standardization across European military equipment.
The initiative reflects the EU's response to growing geopolitical pressures, particularly Russia's ongoing war in Ukraine and calls from the United States for European nations to take greater responsibility for their own security needs. The European Commission proposed the fund earlier this year, specifically to speed up the continent's rearmament efforts in light of these challenges. The approval of SAFE demonstrates the EU's commitment to enhancing its defense capabilities through greater financial cooperation among member states.
The loans-for-arms scheme represents one of the most significant shifts in EU defense policy in recent years, highlighting the bloc's evolving approach to security challenges and its determination to strengthen European strategic autonomy.
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