The European Union (EU) has officially adopted a new financial instrument of 150 billion euros to support member states who want to invest in the production of defense industry through joint purchases in Europe.
In a written statement of the EU Council, it was announced to adopt a decision on the creation of a “security plan for Europe” (SAFE).
, in the framework of the new financial instrument created to strengthen the defense capacity of Europe, the EU will provide loans worth up to 150 billion euros, which will be distributed between the relevant member states upon demand and in accordance with national plans.
In order to apply for loans, the member states will have to make joint purchases with the participation of at least two participating countries.
In connection with the current geopolitical situation and acute need for large investments in the defense equipment, SAFE will also allow for a limited period of time to make purchases with the participation of only one participating country.
Ukraine, as well as Norway, Liechtenstein and Iceland, which are part of the European economic zone, will be considered on the same conditions as the EU member countries. They will be able to not only participate in joint purchases, but also purchase from their own enterprises.
Safe will also allow the Candidate countries to join the EU, potential Candidate countries and countries who have signed a security and defense partnership with the EU, such as Great Britain, to participate in joint purchases.
What defense products are a priority?
products that will be financed through SAFE include “ammunition and missiles; ground -based combat equipment and support systems, including artillery systems, soldier equipment and infantry weapons, including the possibilities of a deep accurate impact; protection of critical infrastructure; cyber; military mobility, missile defense systems, marine agricultural and underwater agents, monitoring systems. UAVs (UAVs) and BPL protection systems, strategic security agents, such as strategic air transport, refueling in the air and C4Istar systems;
Rule “from 35 to 65 percent”
Procurement contracts should guarantee that no more than 35 percent of the estimated cost of the components of the final product will be purchased in countries that are not part of the EU, Ukraine, Norway, Liechtenstein and Iceland.
This means that 65 percent of the total estimated cost of defense products should be purchased in these countries.
SAFE will enter into force on May 29 after publication in the EU official journal.