Source: European Parliament
The deterioration of the security context requires Member States to rapidly invest in defence, with a major impact on public finances. This exceptional situation, beyond Member State control, justifies Article 122 of the Treaty on the Functioning of the European Union (TFEU)[1] as a legal basis, allowing the Council to adopt measures in crisis situations. Security Action for Europe (SAFE) is a new specific and temporary instrument in the form of a regulation.
The role of the European Parliament is pivotal, and the Commissioner for Defence and Space is committed to regularly engage with the European Parliament.
Defence is a Member States’ prerogative. The Commission has the economic and regulatory means to support them.
SAFE loans are not expenditure arising from Common Foreign and Security Policy (CFSP) operations with military or defence implications pursuant to Article 41(2) of the Treaty on European Union[2]. These loans are provided on the basis of Article 122 of the TFEU.
The allocation of the EUR 150 billion loans to Member States for common procurements will be demand driven.
Member States wishing to receive loans will have to submit a Defence Industry Investment Plan to the Commission. The plan will need to include the loan size and pre-financing, a description of the activities, expenditures and measures for which the loan is requested, and, where relevant, the foreseen benefits for Ukraine.
Member States will report every six months on the progress. Where the Commission concludes that the report is unsatisfactory, the payment of all or part of the loan shall be suspended.
The Commission will provide an annual report on the use of financial assistance to the European Parliament and the Council.