EU's SAFE Fund: A Path to Autonomous Defense

The European Commission proposes a €150 billion SAFE fund to bolster EU defense capabilities, encouraging joint procurement with specified partners. Restricted eligibility for non-EU firms, including those from the UK and US, sparks debate. The proposal, under negotiation, requires specific domestic content rules for procurement.

The European Commission has unveiled a proposal for the Security Action for Europe (SAFE) fund, a €150 billion rearmament initiative aimed at enhancing the European Union's defense capabilities by 2030. This move addresses rising concerns over the potential threat from Russia and doubts about continued protection from the United States.

The fund, financed through joint borrowing, will be available to EU members and selected non-EU countries such as Ukraine. However, the proposal has drawn criticism for excluding major defense industry players from the UK and US, although the Commission notes opportunities for their indirect participation.

The eligibility and sourcing rules are under intense discussion among EU members, with countries like France advocating for a 'buy European' approach, while others prefer more openness. Under the proposal, joint procurement projects must involve at least two EU members or partners with Ukraine, allowing limited outside participation if specific agreements are secured.

(With inputs from agencies.)