EU Eyes Second SAFE Loans Scheme as Defence Needs Grow

The European Commission is contemplating a second iteration of the SAFE loans scheme to address heightened defence needs amid concerns over Russian threats and U.S. security commitments. The initial 150 billion euro program was highly oversubscribed, indicating strong demand for additional funding.

The European Commission is contemplating launching a second edition of its substantial SAFE loans scheme aimed at bolstering defence projects across Europe. This consideration comes against the backdrop of increasing concerns over Russian threats and questions about the steadfastness of U.S. security commitments to the region.

Speaking at a Politico event in Brussels, European Commission President Ursula von der Leyen highlighted the scheme's immense popularity, underscored by the oversubscription of the initial 150 billion euro program. European Union officials, speaking on anonymity, confirmed that the idea of a second edition is being actively explored by the Commission.

Under the existing SAFE scheme, the EU leveraged collective borrowing to provide cost-prohibitive loans to EU governments for defence projects, offering significant savings to countries lacking a AAA credit rating. A new edition could be introduced as soon as next year, although precise funding levels remain undetermined at this early stage.

(With inputs from agencies.)