SAFE Explained: The EU's €150bn Defence Loans, Who Gets What

SAFE (Security Action for Europe) is the EU's €150 billion loan instrument for buying defence equipment. The Council adopted it on 27 May 2025, and on 9 September 2025 the European Commission split the whole €150 billion among the 19 Member States that asked for loans, with Poland taking the largest share at €43.7 billion. As of 22 October 2026, 18 of the 19 national plans have Council approval, Poland has received a first payment of €6.6 billion, and Hungary and Italy have cut their requests, which by our arithmetic frees roughly €17.7 billion for a second round.

This explainer covers how the loans work, the full country table, the procurement rules that decide which suppliers can be paid, where the UK, Canada and Ukraine stand, and what is still open.

What SAFE is and how the money moves

SAFE was the second of five strands in the ReArm Europe plan that Commission President Ursula von der Leyen set out on 4 March 2025, when she described "EUR 150 billion of loans to Member States for defence investment" aimed at helping governments "pool demand and to buy together". Our companion piece on ReArm Europe and Readiness 2030 covers the other four strands.

The mechanism is simple on paper. According to the Commission's SAFE page, the Commission borrows on capital markets on behalf of the EU, Member States submit national defence investment plans, the Commission assesses them, the Council approves the financial assistance, and the Commission then signs a loan agreement and pays out. Only EU Member States can borrow; partner countries can only take part in the purchases, as Euronews explained in February 2026.

Purchases financed through SAFE are exempt from VAT, according to an analysis by the Polish Centre for Eastern Studies (OSW) published the day after adoption.

Loan terms: up to 45 years, a 10-year grace period, 15% up front

• Maturity: repayment periods of up to 45 years (OSW, May 2025).
• Grace period: 10 years before repayment starts, according to a September 2025 summary of the Commission's announcement by the European Office of Cyprus.
• Pre-financing: up to 15% can be paid after the loan agreement is signed, if the country asks for it, according to an A&O Shearman briefing. Every first payment the Commission has announced so far equals 15% of the country's allocation.
• Interest: not fixed in advance. Each tranche is a separate loan priced at the EU's own borrowing cost. In May 2026 Polish finance minister Andrzej Domański said the rate would "probably" be slightly above 3%, Notes from Poland reported.
• Concentration cap: the three largest borrowers may take no more than 60% of the €150 billion (OSW). In the September 2025 allocation the top three (Poland, Romania, and France or Hungary, which tied) came to about €76.6 billion, or roughly 51%.

After the 15% advance, the rest is paid in instalments. For Poland, the remaining money arrives in twice-yearly tranches each April and October through 2030, according to Notes from Poland.

Who gets what: the 19 SAFE allocations

The Commission adopted its tentative allocation on 9 September 2025. Requests exceeded the €150 billion, so the Commission guaranteed every applicant at least its minimum requested amount and gave extra weight to countries with a wide gap between their minimum and maximum requests, according to A&O Shearman. Eight Member States did not ask for loans: Austria, Germany, Ireland, Luxembourg, Malta, the Netherlands, Slovenia and Sweden.

Allocations are from the Commission's 9 September 2025 decision as tabulated by A&O Shearman, rounded to two decimals. Status entries combine the Commission's SAFE page, the Council approvals reported by Politis and Anadolu Agency, and the signing list given by a Commission spokesperson to ANSA. Final ceilings can differ from the tentative figures: France's approved ceiling is about €15.09 billion against €16.22 billion allocated, and Estonia's first payment implies an allocation of about €2.34 billion against €2.66 billion.

The money goes overwhelmingly to the eastern flank. Poland alone holds 29% of the pot, and the Polish government says almost 90% of its share will be spent domestically, with state group PGZ expected to be the largest recipient (Notes from Poland). Our guide to Poland's defence industry covers who builds what there, and the Polish, Lithuanian and Estonian sections of our directory list the newer suppliers.

Where SAFE stands in October 2026

• 15 to 27 January 2026: the Commission proposed Council implementing decisions for 16 Member States, starting with a first wave of eight worth about €38 billion on 15 January.
• 11 February 2026: the Council approved the first eight (Belgium, Bulgaria, Cyprus, Denmark, Spain, Croatia, Portugal and Romania). The second eight (Estonia, Greece, Italy, Latvia, Lithuania, Poland, Slovakia and Finland) were cleared by EU ambassadors for formal adoption on 17 February, Politis reported.
• 10 April 2026: final Council approval for Czechia (up to €2.06 billion) and France (up to about €15.09 billion, with about €2.26 billion in pre-financing), according to Anadolu Agency.
• 8 May 2026: Poland became the first country to sign its loan agreement. Domestic politics nearly got in the way: in March 2026 President Karol Nawrocki vetoed the bill needed to receive the money, and the government routed it through the existing Armed Forces Support Fund instead (Notes from Poland).
• 29 May 2026: a Commission spokesperson said five countries had signed: Poland, Lithuania, Croatia, Romania and Belgium. Poland had received €6.6 billion, the first SAFE payment to any country (ANSA).
• June to August 2026: the Commission announced first payments to Cyprus (€177.2 million), Lithuania (€956.3 million), Greece (€118.2 million) and Estonia (€351.6 million).

Adding up the payments published in these sources gives about €8.2 billion paid out so far, roughly 5% of the instrument. That is a floor, not a total: the Commission's page does not list a payment for every country that has signed, so other advances may have gone out without an announcement we could find.

Hungary and Italy: the money coming back

Hungary's plan was the only one never approved. After Péter Magyar replaced Viktor Orbán as prime minister in April 2026, the new government reassessed the request over alleged corruption risks and cut it from €16.4 billion to €5.4 billion, Euronews reported on 25 September 2026. Commission spokesperson Thomas Regnier said Hungary had "decided to take less than what we initially allocated". Note that the €16.4 billion figure in that report differs slightly from the €16.22 billion in the September 2025 allocation table.

Italy asked for about €8 billion instead of the €14.9 billion reserved for it, according to the same Euronews report. On 13 October 2026 Il Foglio reported that the Commission had approved the revised request; the Council still has to approve the updated plan before a loan agreement is signed and the first 15% is paid.

Together, the two cuts return about €17.7 billion (our calculation: €10.8 billion from Hungary and €6.9 billion from Italy). Who gets it is contested. In her State of the Union speech on 16 September 2026, von der Leyen said remaining SAFE funds would finance a new programme of joint projects with Ukrainian companies. Poland, which had planned to bid for leftover money in a second round, was caught off guard, and an EU diplomat told Polish radio RMF FM that member states had not been consulted, Ukrainska Pravda reported. Member states have until the end of October 2026 to report on their SAFE projects; only then can the unused amount be calculated.

Common procurement rules and the 65% test

SAFE is not a blank cheque. Three rules decide what it can buy and from whom.

1. Origin of components. At least 65% of the cost of components must come from the EU, the EEA-EFTA countries or Ukraine (Commission SAFE page). Put the other way, components from anywhere else may not exceed 35% of the estimated cost (OSW).
2. Buying together. Projects generally involve common procurement by at least two countries, at least one of them a Member State receiving SAFE loans. Ukraine and EEA-EFTA states can join on the relevant conditions (Commission). Joint tenders can also include EU candidate countries and states with a Security and Defence Partnership with the EU (OSW).
3. A temporary single-country window. Contracts signed by a single Member State up to 30 May 2026 could still qualify, provided that country had tried to find a partner (OSW). That deadline explains the rush of Polish contracts in May 2026: the government had to sign about 40 arms purchases by the end of the month (Notes from Poland). Some went to drone makers, as our overview of European military drone manufacturers notes.

The capability areas von der Leyen named in March 2025 were air and missile defence, artillery, missiles and ammunition, drones and counter-drone systems, cyber and military mobility. In practice, many SAFE-funded orders also feed the EU's flagship projects, such as the counter-drone layer described in our explainer on the EU drone wall and Eastern Flank Watch.

Third countries: Canada in, the UK out, Ukraine inside

Canada is the first non-European partner. Member State representatives provisionally approved an EU-Canada agreement on 19 December 2025, and on 11 February 2026 the Council authorised its signature; formal conclusion requires the consent of the European Parliament (Politis). The Commission told Euronews that Ottawa paid roughly €10 million, which lets Canadian companies bid for joint SAFE projects.

The United Kingdom has no deal. Talks collapsed in November 2025 over the size of the UK's financial contribution; Bloomberg reported that the Commission sought between €4 billion and €6.75 billion for full participation, as cited by Euronews. Without an agreement, British firms can still supply within the 35% share open to non-eligible countries. Prime Minister Keir Starmer has said the UK would consider joining a possible second edition of the scheme.

Ukraine cannot borrow, but it is treated like an EU source under the 65% rule and can take part in common procurement on equal terms (Commission). If the leftover money is steered into joint projects with Ukrainian companies, Ukraine's industry would become a direct beneficiary rather than a permitted supplier.

What to watch next

• The end-October reporting deadline, which fixes how much SAFE money is unused.
• Council decisions on Italy and Hungary, and whether Hungary's revised €5.4 billion plan is approved before the end of 2026.
• The second round: whether freed money goes to Member States that want more, such as Poland, or to the Ukraine joint-project programme the Commission has announced.
• Disbursement pace: about €8.2 billion of €150 billion confirmed paid by October 2026, with Poland alone accounting for most of it.

For suppliers, the practical point is that SAFE money flows through national ministries of defence under these origin and partnership rules. A company that cannot show that at least 65% of its component cost is European or Ukrainian will find it harder to win SAFE-financed contracts.