Defence investment: Council authorises negotiations with UK and Canada on their participation in SAFE 10:55 Defence investment: Council authorises negotiations with UK and[...]

The Council adopted today a decision authorising the opening of negotiations with the UK and with Canada, respectively, on their participation in the €150 billion SAFE defence loan instrument. Negotiations will be conducted by the Commission and will centre in particular on the conditions under which British and Canadian companies and products may be involved in procurements under the Security Action for Europe (SAFE) funding instrument.

In response to the current geopolitical situation and urgent need for massive investments in defence equipment, the EU will provide through SAFE up to €150 billion that will be disbursed to interested member states upon demand, and on the basis of national plans. The disbursements will take the form of competitively priced long-maturity loans, to be repaid by the beneficiary member states.

Involvement of third countries

SAFE also allows participation of third countries. Acceding countries, candidate countries, potential candidates and countries that have signed a Security and Defence Partnerships with the EU, such as the United Kingdom and Canada, can join common procurements.

Ukraine and EEA-EFTA countries will be treated on the same terms as member states. Not only will they be able to join common procurements, but their industries will also be treated on the same terms as that of the member states. The negotiations with the UK and Canada will aim at defining the terms under which that access can also be extended to UK and Canadian companies and products.

Next steps

The European Commission may now start negotiations on behalf of the EU, based on the mandate set by the Council. The Commission will conduct those negotiations in continuous coordination and permanent dialogue with the Council.

Once the agreements are signed, they will be subject to consent by the European Parliament:

Background

SAFE is the first pillar of the European Commission's ReArm Europe Plan/Readiness 2030, which aims to leverage up to €800 billion in defence spending. SAFE was proposed by the Commission following the push from the European Council to decisively ramp up Europe's defence readiness within the next five years.

The other pillars of the ReArm Europe Plan/Readiness 2030 are: boosting national defence funding by activating the Stability and Growth Pact's national escape clause; making EU instruments such as the cohesion funds more flexible to allow greater defence investment; complementing public funding with contributions from the European Investment Bank; and mobilising private capital.

• Council regulation establishing the Security Action for Europe (SAFE) through the Reinforcement of the European Defence Industry Instrument