Ettepanek

EN EN

EUROPEAN COMMISSION

Brussels, 19.3.2025

COM(2025) 122 final

2025/0122 (NLE)

Proposal for a

COUNCIL REGULATION

establishing the Security Action for Europe (SAFE) through the reinforcement of

European defence industry Instrument

(Text with EEA relevance)

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EXPLANATORY MEMORANDUM

1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

Russia’s military aggression against Ukraine has marked the dramatic return of territorial

conflict and high-intensity warfare on European soil. This structural change in the European

security and defence and European geopolitics, has led Member States to rethink their defence

plans and capacities.

EU Heads of State or Government, meeting in Versailles on 10 and 11 March 2022,

committed to “bolster European defence capabilities” in light of Russia’s military aggression

against Ukraine. These aims were reiterated in the Strategic Compass for Security and

Defence. The Union has adopted two emergency instruments to face the immediate

consequences of Russia’s war of aggression against Ukraine, namely the Regulation

establishing an instrument for the reinforcement of the European defence industry through

common procurement (EDIRPA)1 and the Regulation on supporting ammunition production

(ASAP)2. In view of the continuation of Russia’s war of aggression, on 5th March 2023, the

Commission and High Representative also presented a European Defence Industrial Strategy

(EDIS)3 which highlighted that Member States were still buying predominantly alone and

from abroad. This observation has been confirmed by the report on the future of European

competitiveness, authored by Professor Mario Draghi4. EDIS consequently underlined the

need for Member States to spend more, better, together and European in order to reverse

negative trends affecting the European Defence Technological and Industrial Base (EDTIB)

and effectively enhance the EU’s defence industrial readiness.

The same date, the Commission also tabled the proposal for a European Defence Industry

Programme (EDIP) to start implementing EDIS and address the structural consequences of

Europe’s new security context.

However, this security context has further drastically and brutally deteriorated since early

2025. The EU and its Member States now face an intensifying Russian aggression against

Ukraine and a growing security threat from Russia. It is also now clear that this threat will

persist in the foreseeable future, considering that Russia has shifted to a war-time economy

enabling a rapid scaleup of its military capabilities and replenishment of its stocks. The

European Council therefore underlined, in its conclusions of 6 March 2025, that “Russia’s

war of aggression against Ukraine and its repercussions for European and global security in

a changing environment constitute an existential challenge for the European Union”.

At the same time, the United States, traditionally a strong ally, is clear that it believes it is

over-committed in Europe and needs to rebalance, reducing its historical role as a primary

security guarantor.

1 Regulation - EU - 2023/2418 - EN - EUR-Lex 2 Regulation - 2023/1525 - EN - EUR-Lex 3 Joint Communication to the European Parliament, the Council, the European Economic and Social

Committee and the Committee of Regions: “A new European Defence Industrial Strategy: Achieving

EU readiness through a responsive and resilient European Defence Industry” 4 The future of European competitiveness: Report by Mario Draghi, September 2024

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Despite recent increased defence investment spending by Member States, current investment

levels remain insufficient to compensate past underinvestment and to meet rapidly the

massive defence products needs to deter autonomously the increasing threat posed by Russia.

In view of the unprecedented and rapid worsening of its security environment and the threat it

poses for EU citizens and EU economy, the Union and its Member States must immediately

and massively scale up their efforts to invest in their industrial capacity, hence ensuring their

defence more autonomously. In this context, the Commission presented a 5-pillar ReArm

Europe Plan to the European Council on 6 March 2025. It aims at addressing the urgency of

the situation by unlocking up to EUR 800 billion.

This proposal for a Regulation is one of the pillars of this plan, aiming at mobilising the

Union budget to support and accelerate national investments through a new financial EU

instrument, the Regulation establishing the Security Action For Europe (SAFE) through the

reinforcement of the European defence industry Instrument.

Second, the activation of the national escape clause of the Stability and Growth Pact will

support Member States’ public investments and expenditures in defence.

Third, the mid-term review of the Cohesion Policy will provide additional possibilities and

incentives for Member States to increase funding to the defence sector in cohesion policy

programmes.

The fourth and fifth pillars aims at mobilising private capital by accelerating the Savings and

Investments Union and through the European Investment Bank.

This plan has been unanimously welcomed by the European Council.

Moreover, the Commission and the High Representative have presented, together with this

draft Regulation, a White Paper on the future of European defence. It provides a framework

for the ReArm Europe plan, laying out the case for a once-in-a-generation surge in European

defence investment. It sets out the necessary steps to rebuild European defence, to support

Ukraine, address critical capability shortfalls and establish a strong and competitive defence

industrial base.

The magnitude and the speed of the increase of expenditure in defence industrial capabilities

required from Member States and supported by the ReArm Europe Plan is likely to have, in

the immediate future, a major impact on national public finances at a moment where the

budgets of several Member States continue to be strained.

Therefore, the SAFE Instrument proposed by the European Commission to the Council is a

temporary, emergency instrument to allow for Union financial assistance to Member States in

the form of loans to enable them to carry out the urgent and major public investments in the

European Defence Technological and Industrial Basis (EDTIB) which are required by the

exceptional situation. This instrument aims to promote common procurement, allowing

Member States to progress towards increased market efficiency in the defence sector.

The instrument will provide up to EUR 150 billion in loans to Member States for defence

investment, which will allow procurement of defence capabilities in priority areas identified

by the European Council. It will not only provide visibility to the Union’s defence industry

but also enable a rapid increase of its production capacity, improve the timely availability of

defence products, speed up the development of new defence products or the upgrading of

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existing ones. These priority areas are air and missile defence, artillery systems, missiles and

ammunition, drones and anti-drone systems, strategic enablers and critical infrastructure

protection, including in relation to space, cyber, artificial intelligence and electronic warfare,

and military mobility.

This common procurement approach will benefit the Member States, as they will be able to

reduce their costs, increase their efficiency in defence spending, as well as to significantly

increase the interoperability of their armed forces.

One of the key additional benefits of this initiative is that it will enable Member States to

provide immediate military equipment to Ukraine, which should help Member States to

massively increase their support to the country's war efforts. The SAFE Instrument will

enable Member States to decisively and collectively undertake the substantial investments

necessary to address the current security environment and will incentivise them to do so in a

collaborative manner. By leveraging and further developing the EDTIB, the SAFE Instrument

will ensure its long-term competitiveness

The SAFE instrument should be accessible to all Member States that seek to significantly

increase their defence investments in the EDTIB and are committed to doing so through

collaborative efforts. The establishment of the SAFE Instrument is a further tangible

expression of Union solidarity, whereby the Member States agree to support each other

through the Union by making additional financial resources available through loans.

• Consistency with existing policy provisions in the policy area

The support under the SAFE instrument will be consistent and complementary with existing

collaborative EU initiatives in the field of defence industrial policy.

It will complement the EU’s main programme in this policy area, the European Defence Fund

(EDF). The SAFE instrument will also build on the experience acquired in the context of

other EU programmes, such as EDIRPA or ASAP. The SAFE instrument is fully consistent

with the objectives outlined in EDIS to enhance the EU’s defence industrial readiness and

should contribute to the achievement of its above-mentioned targets. It should also be

complemented by the EDIP, once adopted by Co-legislators with the necessary priority.

EDIP would notably provide for voluntary cooperation frameworks such as the Structure for

European Armament Programmes (SEAP) and European Defence Project of Common Interest

(EDPCI), which can offer avenues to facilitate and enable the Member States’ collaborative

efforts sought under the SAFE instrument. Finally, the SAFE instrument is part of the broader

REARM Europe Plan, unveiled by the European Commission President on 4 March 2025.

• Consistency with other Union policies

The SAFE Instrument will build on the experience of SURE and the Recovery and Resilience

Facility, offering a loan-based mechanism to support Member States in implementing

investment plans aiming at supporting the Union’s defence industry. By conditioning EU

loans to common procurement and to the implementation of these plans, the SAFE instrument

will incentivise Member States to invest in their defence manufacturing capacities, while

promoting a coordinated European approach to defence industrial investments.

The SAFE Instrument will generate synergies with EU defence policy and the implementation

of the Strategic Compass for Security and Defence. As the other defence industrial policy

initiatives, it will be implemented in full consistency with the EU Capability Development

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Plan (CDP) identifying the defence capability priorities at EU level, as well as with the EU

Coordinated Annual Review on Defence (CARD), which inter alia identifies new

opportunities for defence cooperation.

Finally, the SAFE Instrument will also complement EU initiatives to support Ukraine, such as

the Ukraine Assistance Fund, the Ukraine Facility, the Ukraine Support Instrument or the

Ukraine Loan Cooperation Mechanism. By making available EUR 150 billion to Member

States for the common procurement of defence products, the Union will reinforce the ability

of its Member States to transfer more defence capabilities to Ukraine, notably through the

immediate and further provision of material from their national stocks.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

The legal basis for this instrument is Article 122 of the Treaty on the Functioning of the

European Union (TFEU).

The brutal deterioration of the Union’s security context since the beginning of 2025 is a

sudden and exceptional event entailing a massive and potentially disruptive impact on the

supply of defence products essential for the defence and security interests of the Union and its

Member States, which is likely to have a serious impact on the public finances of the Member

States, calling for collective responses in a spirit of solidarity. Through the SAFE instrument,

the Council, in a spirit of solidarity between Member States, would decide to provide to the

Member States that wish to make use of it, a financial assistance mechanism tailored to

address the unprecedented geopolitical context and the related public security challenges that

justifies the intervention under Article 122 TFEU as an emergency instrument. This

mechanism will allow Member States to engage quickly in public spending to the benefit of

the European defence Technological and Industrial Base (EDTIB) with the objective to

mitigate as soon as possible the severe difficulties in the supply of defence products that arise

from this situation.

The organisation and management of the loan scheme allows the Council to provide, on a

temporary and ad hoc basis, Union financial assistance, on a proposal from the Commission,

to a Member State in difficulties or seriously threatened with severe difficulties caused by

natural disasters or exceptional occurrences beyond its control subject to certain conditions

such as the exceptional and unprecedented security context. This legal base would underpin

the lending component of the SAFE Instrument.

Article 122 TFEU is the appropriate legal basis for financial assistance responding to crisis or

exceptional event and is not confined to crises of a financial or financial stability nature. The

Council has a broad margin of discretion for assessing whether it is necessary to have

recourse to that instrument in a context of emergency. In the past, it has used this provision to

provide financial assistance to Member States experiencing sudden and exceptional increases

in public expenditure, such as during the COVID-19 pandemic, where it helped preserve

employment (SURE Instrument)5. Similarly, the Council is entitled to invoke this provision in

the current exceptional security context to provide financial assistance, through the SAFE

5 Council Regulation (EU) 2020/672 of 19 May 2020 on the establishment of a European instrument for

temporary support to mitigate unemployment risks in an emergency (SURE) following the COVID-19

outbreak.

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instrument, to Member States that need to make urgent and massive investments in the EU's

defence manufacturing capacities, through collaborative procurement, hence enhancing their

military capabilities.

• Subsidiarity (for non-exclusive competence)

The planned measures of the present initiative are fully in line with the subsidiarity principle.

The Union is faced with an emergency situation, which could potentially affect all its Member

States and requires a combination of actions at Union level and at Member State level to

rapidly scale up the EDTIB and ensure thereby a sufficient and autonomous production

capacity of defence products. This instrument provides a contribution at Union level to the

urgent need for Member States to address the increased needs of public spending in the

production of defence equipment from Member States and Ukraine and complement the

efforts that Member States will engage at national level. It takes into account the fact that the

EDTIB remains to a large extent tailored for peacetime, due to the Member States’ policy and

budgetary choices in the past decades to allocate, in a different geopolitical context, the

dividend of peace to other societal uses, and the need to allow them to adapt to the drastic

deterioration of the geopolitical context.

Moreover, an action at Union level will have the additional value to ensure a ramp-up of the

EDTIB which is beneficial for all the Member States. Indeed, in light of the urgent need for

Member States to face current security threats and given the prevailing trend underlined in the

European Defence Industrial Strategy, there is a systemic risk for the EU that Member States

substantially increase their defence investments in an uncoordinated way and mostly to the

benefit of non-EU defence manufacturers. Such an uncoordinated approach would likely

result in significant inefficiencies in public spending, lead to a price spiral for defence

equipment, and potentially crowding out of Member States having a limited purchasing

power. Furthermore, such an uncoordinated approach would exacerbate the fragmentation of

the EDTIB, severely undermining its long-term competitiveness. Therefore, there are

compelling economic and policy justifications for promoting cooperation and common

procurement among Member States, in line with the goals outlined in EDIS. In this context,

EU-level action is crucial to ensure solidarity among Member States of and to guarantee their

access to a competitive and efficient EDTIB.

The combined effect of a massive level of investment and such an aggregation of demand is

expected to result in a very substantial defragmentation of the EDTIB and in a very significant

increase of its manufacturing capacities. Such a signal will indeed enable the EDTIB to

trigger a sufficient and proportionate ramp-up. There is currently or in the foreseeable future

no other instrument at EU level with sufficient financial firepower to trigger such a demand

signal to industry.

In addition, an action at Union level allows to introduce targeted derogations to Directive

2009/81/EC on the coordination of procedures for the award of certain works contracts,

supply contracts and service contracts by contracting authorities or entities in the fields of

defence and security in order to create the conditions to facilitate and accelerate the common

procurement of defence procurement involving the financial assistance under this instrument,

thus contributing to solve the situation of emergency justifying the use of this Instrument.

• Proportionality

The proposal respects the proportionality principle. It does not go beyond what is necessary to

achieve the objectives sought by the instrument.

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The derogations to the Financial Regulation, to Directive 2006/112/EEC and to Directive

2009/81/CE are strictly connected with the use of the financial assistance provided by this

instrument and will be limited to the period under which this instrument deploys its effects.

• Choice of the instrument

This act takes the form of a Regulation because it creates a new specific and temporary

instrument that could be used by any Member State and has to be binding in its entirety and

directly applicable in all Member States. The form of a Regulation has been used in all the

acts involving Article 122 TFEU.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER

CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex-post evaluations/fitness checks of existing legislation

Due to the urgency to prepare the proposal so that it can be adopted in a timely manner by the

Council, a stakeholder consultation could not be carried out.

• Stakeholder consultations

Due to the urgency to prepare the proposal so that it can be adopted in a timely manner by the

Council, a stakeholder consultation could not be carried out.

• Impact assessment

Due to the urgent nature of the proposal, no impact assessment was carried out.

• Fundamental rights

Right to life, liberty and security are enshrined in Article 2 and 6 of the Charter of

Fundamental rights. Public security is also an overriding reason of public interest.

Moreover, enhancing the capacity of the Member States to defend the integrity of their

territory and the security of EU citizens contributes to safeguarding their most fundamental

rights.

The Regulation ensures a right balance between the protection of these fundamental rights and

of the overriding public objective of public security and other fundamental rights such as the

freedom to conduct a business and the freedom of contract which are provided for by Article

16 of the Charter of Fundamental Rights of the European Union. In particular, the Regulation

provides for the possibility to substantially modify an existing framework agreement under

Directive 2009/81/EC. However, such a possibility is conditioned to the prior agreement of

the undertaking with which the framework agreement concerned has been concluded.

4. BUDGETARY IMPLICATIONS

The Commission should be able to contract borrowings on the financial markets in

accordance with the diversified funding strategy.

The SAFE instrument will take the form of a lending scheme of up to EUR 150 billion

underpinned by a guarantee from the Union under Article 2(3) of the MFF Regulation, while

ensuring that the contingent liability for the Union arising from the instrument is compatible

with the Union budget constraints, in line with Article 3(1) of the MFF Regulation and with

Council Decision 2020/2053.

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This Regulation provides for safeguards to ensure the financial solidity of the scheme:

• A rigorous and conservative approach to financial management;

• A construction of the portfolio of loans that limits concentration risk, annual

exposure and excessive exposure to individual Member States whilst ensuring

sufficient resources could be granted to Member States most in need; and

• Possibilities to roll over debt.

Given the temporary nature of the financing scheme of the SAFE instrument, the requests for

the last instalment for loans shall be limited to 31 December 2030.

5. OTHER ELEMENTS

• Detailed explanation of the specific provisions of the proposal

Article 1 of the proposed Council Regulation provides for the establishment of the Security

Action For Europe (SAFE) through the Reinforcement of European Defence Industry

instrument. This instrument would be ad hoc and temporary in view of its legal basis. It would

provide financial assistance under Article 223 of the Financial Regulation in support of

Member States confronted with the need to carry out urgent and major public investments to

support the European defence industry.

Article 2 of the proposed Regulation provides for definitions to be applied for the purposes of

the Regulation, in particular definitions relating to defence products or common procurement.

Article 3 of the proposed Regulation stresses the complementary nature of the SAFE

instrument. It should complement efforts undertaken by Member States at national level and

should enable Member States to accelerate these investments, in a coordinated manner.

Article 4 of the proposed Regulation lays down the conditions for activating the instrument.

Member States may request financial assistance where they plan to carry out activities,

expenditures and measures through common procurement with the aim of supporting the

adaptation of the EDTIB to the structural changes.

Article 5 of the proposed Regulation determines that financial assistance under the proposed

SAFE instrument will take the form of a loan granted to the Member State concerned.

Article 6 of the proposed Regulation establishes the maximum amount of Union financial

assistance that can be provided under the SAFE instrument and specifies a date up to which

amounts of loans can be approved by the Commission based on presentation of a plan. It

concerns an amount of up to EUR 150 billion.

Article 7 of the proposed Regulation sets out the content and the process for the submission of

the European Defence Industry Investment Plan that Member States wishing to receive

financial assistance under the SAFE instrument will have to submit to the Commission. The

Commission will apply a three-stage process. As a first step, the Commission will launch a

call for expressions of interest, requesting interested Member States to provide for a target for

the financial assistance requested as well as an indicative maximum and minimum loan

amount. The deadline for submission for expressions of interests should not exceed two

months as of the entry into force of the Regulation. As a second step, the Commission notifies

interested Member States, within two weeks following the end of the submission deadline,

about the tentative allocations of the loan amounts available to each Member State. As a third

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step, interested Member States submit their European defence industry investment plan within

six months as of the entry into force of the Regulation.

The European Defence Industry Investment Plan will notably include a description of the

activities, expenditures and measures planned by this Member State for which it requires

financial assistance and notably a description of the defence product needs related to

investment areas outlined in the conclusions of the European Council of 6 March 2025 as well

as measures this Member State intends to implement to comply with the conditions included

in the Regulation and obligations under EU law.

Article 8 of the proposed Regulation establishes the procedure for granting swiftly financial

assistance to Member States. Following a request by a Member State accompanied by a duly

substantiated European Defence Industry Investment Plan, the Commission would assess this

plan to verify that it fulfils the conditions required under this Regulation. Elements such as the

amount, the amount of the potential pre-financing, the assessment of the European Defence

Industry Investment Plan should be included in the Commission Implementing Decision. In

its Implementing Decision, the Commission shall give a sufficient explanation of its

assessment, in particular were it to decide not to grant financial assistance to a Member State.

This article also sets out the conditions for the Commission to launch a new call of

expressions of interest before 31 December 2026 in case amounts remain available.

Articles 9 to 13 of the proposed Regulation contain the procedural rules for the disbursement

and implementation of the loan support under the SAFE instrument. More specifically, they

deal with rules on the operational arrangements, the borrowing and lending operations, the

pre-financing, the rules on payment and suspension of loans and the prudential rules

applicable to the portfolio of loans under the instrument.

Articles 14 and 15 of the proposed Regulation lay down rules on controls and audits and

reporting.

Article 16 of the proposed Regulation sets out the eligibility conditions a Member State which

benefits from the financial assistance under the SAFE Instrument shall comply with when

carrying out a common procurement. These notably concern participation conditions for

contractors and subcontractors involved in the common procurement supported by the SAFE

instrument as well as specific conditions related to the products object of the common

procurement supported by the SAFE instrument.

Article 17 of the proposed Regulation lays down the rules under which contractors or

subcontractors of third countries other than EEA EFTA States and Ukraine can participate to

common procurements supported by the SAFE instrument. The Article provides for a

graduated approach ensuring a fair balance as regards potential third country commitments

towards the Union, including their financial contributions, and the benefits of the third

country concerned, in particular benefits for its industry participating in the common

procurement as contractors or subcontractor involved in the common procurement.

Articles 18 and 19 of the proposed Regulation lay down rules aiming at facilitating and

accelerating common procurement procedures. More specifically, they include a derogation

from Directive 2009/81/EC in order to allow for the substantial modification of existing

framework agreements for the benefit of a Member State which benefits from financial

assistance under the SAFE instrument and a clarification that a common procurement

involving at least one Member State which benefits from financial assistance under the SAFE

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instrument could be awarded through a negotiated procedure without a prior publication of a

contract notice.

Article 20 of the proposed Regulation provides for a temporary VAT exemption on

importation and supply of defence products subject to common procurement under this

instrument.

Article 21 of the proposed Regulation sets out the rules applicable to classified and sensitive

information which may be involved in the implementation of the Regulation.

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2025/0122 (NLE)

Proposal for a

COUNCIL REGULATION

establishing the Security Action for Europe (SAFE) through the reinforcement of

European defence industry Instrument

(Text with EEA relevance)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular

Article 122 thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1) Russia’s war of aggression against Ukraine and its repercussions for European and

global security constitute an existential challenge for the European Union.

(2) In response to that challenge, in its conclusions of 6 March 2025, the European

Council, recalling the Versailles Declaration of 11 March 20226 and the Strategic

Compass for Security and Defence adopted on 21 March 20227, stressed that Europe

must become more sovereign, more responsible for its own defence and better

equipped to act and deal autonomously to cope with immediate and future challenges

and threats. In that extraordinary European Council meeting, all Member States

committed to reinforce their overall defence readiness, reduce strategic dependencies,

address critical capability gaps and strengthen the European defence technological and

industrial base accordingly across the Union so that it is in a position to better supply

equipment in the quantities and at the accelerated pace needed.

(3) On 18 May 2022, the Commission and the High Representative of the Union for

Foreign Affairs and Security Policy presented a Joint Communication8 on the Defence

Investment Gaps Analysis and Way Forward, highlighting the existence, within the

Union, of defence financial, industrial and capability gaps.

(4) On 20 July 2023 the European Parliament and the Council adopted Regulation (EU)

2023/15259 supporting ammunition production (ASAP), aimed at urgently supporting

the ramp-up of manufacturing capacities of the European Union defence industry,

6 https://www.consilium.europa.eu/media/54773/20220311-versailles-declaration-en.pdf 7 https://data.consilium.europa.eu/doc/document/ST-7371-2022-INIT/en/pdf 8 Joint Communication to the European Parliament, the European Council, the Council, the European

Economic and Social Committee and the Committee of the Regions on the Defence Investment Gaps

Analysis and Way Forward, JOIN(2022) 24 final, 18 May 2022. 9 Regulation (EU) 2023/1525 of the European Parliament and of the Council of 20 July 2023 on

supporting ammunition production (ASAP) (OJ L 185, 24.7.2023, p. 7, ELI:

http://data.europa.eu/eli/reg/2023/1525/oj).

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secure supply chains, facilitate efficient procurement procedures, address shortfalls in

production capacities and promote investments.

(5) On 18 October 2023, the European Parliament and the Council adopted Regulation

(EU) 2023/2418 on establishing an instrument for the reinforcement of the European

defence industry through common Procurement (EDIRPA)10, aimed at supporting

collaboration between Member States in the procurement phase to fill the most urgent

and critical gaps, especially those created by the response to Russia’s war of

aggression against Ukraine, in a collaborative way.

(6) On 14 and 15 December 2023, the European Council, in its conclusions, having

considered work carried out to implement the Versailles Declaration and the Strategic

Compass for Security and Defence, underlined that more needs to be done to fulfil the

Union’s objectives of increasing defence readiness. In order to achieve such readiness

and defend the Union, a strong defence industry was considered to be a pre-requisite,

requiring the European defence industry to become more resilient, innovative and

competitive.

(7) On 5 March 2024, the European Commission adopted a proposal for a Regulation of

the European Parliament and of the Council establishing the European Defence

Industry Programme and a framework of measures to ensure the timely availability

and supply of defence products (‘EDIP’) in order to build on the experience acquired

in the context of EDIRPA and ASAP and extend their logic in a more long-term and

structured perspective.

(8) However, since the beginning of 2025, there has been a stark deterioration of the

Union’s security context, linked not only to Russia’s persistent threat and its

intensified shift to a war-time economy and to the evolution of the war in Ukraine, but

also to uncertainties stemming from the advent of a geopolitical situation in which the

Union has to markedly step up its efforts to ensure its defence autonomously. That

recent deterioration increases the level of threat to the European Union and requires

that Member States launch, as a matter of emergency, massive public expenditures to

scale up the European Defence Technological and Industrial Base (EDTIB). As a

consequence, it also increases the need to accelerate, in a spirit of solidarity, the

making available of Union support to those Member States which are likely to be

threatened by serious difficulties due to the massive public investments needed, which

may have an impact on their economic situation. Due to the time needed to develop

products and ensure the ramp-up of the corresponding industrial production capacity,

it becomes vital for the Union to start as soon as possible the support to these Member

States so that they can very rapidly place orders, increase predictability for the defence

industrial sector, incentivising it to invest in the very short term for the purpose of

strengthening production capacities.

(9) The magnitude and the speed of the increase of expenditure in defence industrial

capabilities required from the Member States is likely to have a major impact on their

public finances at a moment where the budgets of several Member States continue to

be strained.

10 Regulation (EU) 2023/2418 of the European Parliament and of the Council of 18 October 2023 on

establishing an instrument for the reinforcement of the European defence industry through common

procurement (EDIRPA), OJ L, 2023/2418, 26.10.2023.

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(10) This exceptional situation, not caused by the Member States and beyond their control,

justifies that the Union takes urgent measures to make available to those of the

Member States that want to invest in defence industrial production a temporary

instrument that would provide them financial assistance in the form of the Security

Action For Europe Instrument (‘the SAFE instrument’).

(11) The SAFE instrument should enable urgent and major public investments in the

European defence industry aiming at a rapid increase of its production capacity,

improvement of the timely availability of defence products and speeding-up and

adjustment to structural changes. As this Regulation is an exceptional and temporary

response to an urgent and existential challenge, the financial assistance provided under

it should only be made available for the purposes of addressing the adverse economic

consequences of the deteriorating security situation and the immediate procurement

needs of Member States contributing to increased defence industrial readiness of the

EDTIB. This Instrument should be part of an overall effort at national and Union level

to devote more resources for defence industrial investments to remedy the crisis

situation arising from the current security threats. Other means of action should be

engaged in parallel at Union and national level to accompany that effort, such as the

activation of the existing flexibility within the framework of the Stability and Growth

Pact.

(12) The financial assistance under the SAFE instrument should be implemented by

Member States in a manner that is consistent with the defence capability priorities

commonly agreed by Member States within the framework of the Common Foreign

and Security Policy (CFSP), the Member States’ cooperation within the framework of

the Permanent Structured Cooperation established by Council Decision (CFSP)

2017/231511, the European Defence Agency’s (EDA) initiatives and projects, and the

Union’s civil and military assistance to Ukraine. When implementing this Regulation,

the Member States should duly take into account the relevant activities carried out by

the North Atlantic Treaty Organisation (NATO) and other partners where such

activities serve the Union's security and defence interests.

(13) Member States should be able to use the financial assistance under the SAFE

instrument in synergy with other existing and future Union programmes, in particular

to co-finance specific actions. In parallel, Union programmes supporting cooperation

in the field of defence procurement or aiming more generally at supporting the

competitiveness of the EDTIB might specifically provide for an additional Union

support to common procurement benefitting from the financial assistance under the

SAFE instrument or to economic operators involved in such a procurement to

stimulate corresponding industrial ramp-up and further reinforce the effects of the

instrument on the EDTIB.

(14) In order to reduce the administrative burden for Member States, it should be possible

for the Commission to consider, in the framework of relevant programmes and notably

those supporting the cooperation in the field of common procurement, the information

provided in the framework of this Regulation, and notably for the purpose of the

reporting of the implementation of the financial assistance, to simplify the conditions

of the application for financial support.

11 Council Decision (CFSP) 2017/2315 of 11 December 2017 establishing permanent structured

cooperation (PESCO) and determining the list of participating Member States (OJ L 331, 14.12.2017, p.

57, ELI: http://data.europa.eu/eli/dec/2017/2315/oj).

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(15) Lack of cooperation between Member States has led to inefficiencies and a

multiplication of defence systems of the same kind within the Union, undermining the

objective of protection of the Union territory pursued by the corresponding national

investments while also resulting in fragmentation and sub-scale operations of

significant parts of the EDTIB. To address that situation, beneficiary Member States

should use the financial assistance provided under this Regulation to carry out

common procurements. The eligible activities, expenditures and measures financed

through defence common procurement should relate to the following priority areas

identified by the European Council, taking into account the lessons learned from the

war in Ukraine, in accordance with the work already done in the framework of the

European Defence Agency (‘EDA’) and in full coherence with NATO: air and missile

defence, artillery systems, including deep precision strike capabilities, missiles and

ammunition, drones and anti-drone systems, strategic enablers, including in relation to

space and critical infrastructure protection, military mobility, cyber, artificial

intelligence and electronic warfare. Those common procurements should aim at

speeding up the adjustment to structural changes of the production capacity of defence

products, incentivising cooperation in the procurement phase, supporting the increase

of production capacity, as well as development and acquisition of the related

infrastructure, equipment and logistic services.

(16) In order to urgently reinforce the Union industrial base in an efficient and autonomous

manner, in the light of the recent evolution of the geopolitical situation and the

exceptional threat to the security of the Union and the Member States, and thus

increase the efficiency and added value to the financial assistance granted under the

SAFE instrument, this Regulation should establish eligibility conditions for the use of

the financial assistance by Member States. Contractors and subcontractors involved in

the common procurement under this instrument should therefore be established and

have their executive management structures in the Union, in EFTA members of the

EEA (‘EEA EFTA States’) or in Ukraine, and use for the purposes of the common

procurement infrastructure, facilities, assets or resources located on the territory of a

Member State, an EEA EFTA State or Ukraine. In order to ensure that contractors and

subcontractors involved in the common procurement do not contravene the security

and defence interests of the Union and its Member States they should not be controlled

by third countries or third country entities. In that context, control should be

understood to be the ability to exercise a decisive influence on a legal entity directly,

or indirectly through one or more intermediate legal entities.

(17) In certain circumstances, it should be possible to derogate from the principle that legal

entities involved in a common procurement use infrastructure, facilities, assets or

resources located on the territory of a Member State, an EEA EFTA State or Ukraine,

and are not subject to control by third countries or third-country entities. In that

context, a legal entity established in the Union, EEA EFTA State or in Ukraine using

infrastructure, facilities, assets or resources located outside the territory of a Member

State, EEA EFTA State or Ukraine, and/or controlled by a third country or a third

country entity may participate if strict conditions are fulfilled relating to the security

and defence interests of the Union and its Member States, as established in the

framework of the Common Foreign and Security Policy (CFSP) pursuant to Title V of

the Treaty on European Union (TEU).

(18) Legal entities established in the Union, EEA EFTA States or Ukraine and controlled

by a third country which is not Ukraine nor an EEA EFTA State (‘other third country’)

or another third-country entity, where allowed, should be eligible to participate in the

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common procurement if they have been subject to screening within the meaning of

Regulation (EU) 2019/452 and, where necessary, to appropriate mitigation measures

or if guarantees approved in accordance with the national procedures of the Member

State, EEA EFTA State or Ukraine in which they are established are made available to

the Commission. Such guarantees should only be issued provided that strict conditions

relating to the security and defence interests of the Union and its Member States, as

established in the framework of the CFSP pursuant to Title V of the TEU, are fulfilled.

(19) In order to ensure the timely availability and supply of defence products from the

EDTIB and to accelerate its adjustment to structural change and thus reinforce the

efficiency of the financial assistance granted, it is important to set minimum

conditions related to the value generated within the Union. Therefore, common

procurement contracts should contain a requirement that the costs of the components

originating in the Union, EEA EFTA States or Ukraine are not lower than 65% of the

estimated costs of the end-product.

(20) For certain defence product, whose underlying technologies are not widely available in

the Union, and which may be difficult to substitute at a large scale, additional

conditions should be required to ensure Member States’ armed forces freedom related

to these products without limitations imposed by third countries. Where such products

are subject to restrictions, contractors should have the legal ability, without any

restriction from a third country or a third country entity, to replace those components

causing the restrictions with components of EU origin that are free of those restrictions

as well as to decide on the definition and evolution of the product concerned.

(21) Eligibility conditions of the instrument pursue the objective of immediately ramping

up the manufacturing capacities of the Union defence industry, while allowing for the

necessary flexibility taking into consideration the internationalisation of supply chains

for relevant products and technologies. In addition to Ukraine and EFTA EEA States,

the SAFE instrument should also provide for the possibility for acceding countries,

candidate countries and potential candidates, as well as third countries with whom the

Union has entered into a Security and Defence Partnership (Non-Binding Instrument,

NBI), to participate in common procurements under the SAFE instrument. Bilateral or

multilateral agreements between the Union and one or more of those countries should

also enable the possible participation of contractors and subcontractors established in

the respective countries in common procurements under the SAFE instrument,

according to terms and conditions to be defined in those agreements.

(22) Members States wishing to obtain financial assistance under the SAFE instrument

should submit a request to the Commission accompanied by a European defence

industry investment plan. To facilitate the preparation of plans, the Commission and

Member States should engage in exchanges with a view of identifying tentative

allocations of the loan amounts. The Commission should assess all requests submitted

by the Member States. When assessing national plans, the Commission should call

upon the expertise of EDA or the EU Military Staff, where appropriate. The

Commission should allocate the loan amounts to the Member States concerned by

applying the principles of equal treatment, solidarity, proportionality and transparency,

in particular if the sum of requested loan amounts exceeds the total maximum amount

of financial assistance available under the SAFE instrument. Loans should be allocated

among the Member States which apply in accordance with the principles of equal

treatment, solidarity, proportionality and transparency. The European defence industry

investment plans should describe measures to strengthen the resilience of the

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European defence industrial sector, notably by facilitating the access to the defence

market for SMEs, mid-caps and new defence players.

(23) In order to facilitate the implementation of the European defence industry investment

plan the Commission and each Member State concerned should enter into an

operational arrangement with details concerning the disbursement of the financial

assistance, including a tentative schedule of disbursement, and sign a loan agreement

with the detailed terms of the loan support under the SAFE instrument. Pre-financing

of 15 percent should be provided to allow a rapid start of the implementation of the

activities, expenditure and measures under the SAFE instrument.

(24) It is appropriate to organise the financial assistance under the diversified funding

strategy provided for in Article 224 of the Financial Regulation (Regulation (EU,

Euratom) 2024/2509) and established single funding method, which is expected to

enhance the liquidity of Union bonds and the attractiveness and cost-effectiveness of

Union issuances. For prudential reasons related to the management of the loan

portfolio, the share of loans granted to the three Member States representing the

largest share of the loans granted should not exceed 60 per cent of the maximum

amount of financial assistance under the Instrument.

(25) Common procurements should involve at least two participating countries that are

Member States, EEA EFTA States or Ukraine, out of which at least one should be a

Member State benefiting from loan support under the SAFE instrument. In addition,

acceding countries, other candidate countries and potential candidates, and other third

countries with whom the Union has entered a Security and Defence Partnership (NBI)

should be allowed to participate in common procurements made with a Member State

supported with the financial assistance under the SAFE instrument. The inclusion of

EEA EFTA States and Ukraine among the countries that may make up the minimum

required number for a common procurement is justified respectively by those

countries’ close partnership with the Union in industrial defence production and by the

fact that Ukraine is directly faced with Russia’s ongoing war of aggression. Member

States are also encouraged to further support Ukraine with the equipment procured

with the financial assistance of the SAFE instrument The participation of these third

countries to common procurements awarded to the EDTIB or the Defence and

Technology Industrial Base of Ukraine or of EEA EFTA States should increase the

level of aggregation of demand necessary to obtain a scale-up of industrial capacity

and provide support to the interoperability of systems and products deployed by the

Union’s closest partners in this area while potentially allowing the Member States

which participate in these those procurements to obtain better prices.

(26) Directive 2009/81/EC of the European Parliament and of the Council sets out a

legislative framework on the coordination of procurement procedures for the award of

contracts in the fields of defence and security, taking into account the security

requirements of Member States and the obligations arising from the Treaty. That

Directive sets out specific rules applicable in cases of urgency resulting from a crisis,

such as shortening periods for the receipt of tenders and the possibility to use the

negotiated procedure without prior publication of a contract notice. In order to

reinforce the efficiency of the SAFE instrument to address, in a spirit of solidarity, the

situation of emergency arising from the evolution of the geopolitical situation, it is

necessary that massive investments in the EDTIB are launched as soon as possible.

(27) For that purpose, the award of the contracts based on common procurements involving

at least one Member State supported by the financial assistance under the SAFE

EN 16 EN

instrument should be facilitated. Therefore, Member States carrying out common

procurements using the assistance provided under the SAFE instrument should be

deemed to be in a situation of urgency resulting from a crisis, which justifies the use of

a negotiated procedure without publication of a contract notice as provided for in

Directive 2009/81/EC. Moreover, in order to safeguard the security interests of the

Member States which participate in common procurements supported by the SAFE

instrument, it is also necessary to provide for the possibility of opening an existing

framework agreement or contract to contracting authorities of Member States that

were not originally parties to that agreement, even though the latter had not initially

provided for such a possibility, on condition that the prior consent of the undertaking

which concluded the framework agreement is obtained.

(28) This instrument aims at contributing to an overriding interest of public security which

consists in accompanying the financial efforts of the Member States to ensure, via a

scale-up of the EDTIB, a timely availability and supply of defence products that will

allow the Member States to be prepared for any kind of aggression. Through the use of

eligibility conditions, it aims to support the competitiveness and the industrial

readiness of the EDTIB which are necessary to improve the capacity of the Member

States to defend the territory of the Union and of its Member States in an efficient and

autonomous manner. It also pursues an ancillary objective of increasing, through the

use of common procurements, the level of interoperability of defence products. To

accompany these efforts, it is appropriate, in a spirit of solidarity and in order to

ensure the financial sustainability of the effort that is necessary to address the severe

difficulties in the availability of defence products, to take measures to avoid having to

finance taxes on these expenditures upfront. Defence products acquired under common

procurements involving the contribution of this instrument should therefore be

exempted from the value added tax (VAT), by the introduction of a temporary

exemption from VAT under Directive 2006/122/CEE. This exemption should limited

in time and only apply for the duration of the contracts resulting from common

procurements under the SAFE instrument.

(29) The Union remains fully committed to international solidarity. Any measures deemed

necessary taken under this Regulation, including those necessary to prevent or relieve

critical shortages, should be implemented in a manner that is targeted, transparent,

proportionate, temporary and consistent with WTO obligations.

(30) It should be possible for the Commission and Member States to engage in

communication activities to ensure the visibility of Union funding and, as appropriate,

to ensure that support under the SAFE instrument is communicated and acknowledged

through a funding statement.

(31) This Regulation is without prejudice to each Member State having the sole

responsibility for its national security, as provided for in Article 4(2) TEU, and the

right of each Member State to protect its essential security interests in accordance with

Article 346 TFEU.

(32) In order to allow for the implementation of this Regulation to start as soon as possible,

with a view to reaching its objectives, it should enter into force as a matter of urgency,

EN 17 EN

HAS ADOPTED THIS REGULATION:

Article 1

Subject matter and scope

This Regulation establishes the Security Action For Europe (SAFE) through the

Reinforcement of European Defence Industry Instrument (the ‘SAFE instrument’) providing

financial assistance to Member States allowing them to carry out urgent and major public

investments in support of the European defence industry.

This Regulation sets out the conditions and procedures under which the financial assistance

under the SAFE instrument shall be provided to and implemented by the Member States and

lays down the rules on simplified and accelerated common procurement procedures for the

acquisition of defence products and other products for defence purpose belonging to the

following categories:

• Category one: ammunition and missiles; artillery systems; small drones (NATO class

1) and related anti-drone systems; critical infrastructure protection; cyber and

military mobility.

• Category two: air and missile defence; drones other than small drones (NATO class 2

and 3) and related anti-drone systems; strategic enablers; space assets protection;

artificial intelligence and electronic warfare.

Article 2

Definitions

For the purposes of this Regulation, the following definitions apply:

(1) ‘defence product’ means goods, services and works that fall within the scope of

Directive 2009/81/EC, as set out in Article 2 thereof;

(2) ‘other products for defence purposes’ means any good, service and work other than

those falling within the scope of Directive 2009/81/EC, as set out in Article 2

thereof, which are necessary for or aimed at defence purposes;

(3) ‘common procurement’ means the procurement procedure of defence products or

other products for defence purpose and the resulting contracts, carried out by at least

one Member State receiving financial assistance under this instrument and one

additional Member State or one Member of the European Free Trade Association

which are members of the European Economic Area (‘EEA EFTA States’) or

Ukraine. In addition, the common procurement may include acceding countries,

candidate countries and potential candidates, and other third countries with whom the

Union has entered a Security and Defence Partnership (Non-Binding Instrument,

NBI).

Article 3

Complementary nature of the SAFE instrument

The SAFE instrument shall complement the measures taken by the Union as well as by

Member States to carry out urgent and major public investments to support the European

defence industry.

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Article 4

Conditions for using the SAFE instrument

1. A Member State may request financial assistance under the SAFE instrument

(‘financial assistance’) for activities, expenditures and measures related to defence

products or other products for defence purpose carried out through common

procurements respecting the eligibility rules set out in Article 16 and aiming at, in

particular:

(a) speeding up the adjustment of the defence industry to structural changes,

including through the creation and ramp-up of its manufacturing capacities as

well as related supporting activities;

(b) improving the timely availability of defence products, including through the

reduction of their delivery lead time, reservation of manufacturing slots or

stockpiling of defence products, intermediate products or raw materials;

(c) ensuring interoperability and interchangeability across the Union.

2. A Member State may use financial assistance under the SAFE instrument in synergy

with other Union programmes in accordance with the rules of those programmes.

Financial assistance under the SAFE instrument may also be used to finance

activities which have received a Union contribution under another Union

programme.

3. By derogation to paragraph 1, procurements carried by one Member State may be

eligible for support under the SAFE instrument during 12 months after the entry into

force of the Regulation. Where a Member State includes such a procurement in the

plan referred to in Article 7(2), it shall actively take all necessary steps to extend the

benefit of the contract concerned to at least one additional Member State or one EEA

EFTA State or Ukraine, in addition to any interested acceding country, candidate

country, potential candidate, or other third country with whom the Union has entered

a Security and Defence Partnership. Eligibility conditions established in Article 16(2)

to (12) shall apply mutatis mutandis.

Article 5

Form of the financial assistance

The financial assistance shall take the form of a loan granted by the Union to the Member

State concerned.

Article 6

Maximum amount of financial assistance

The maximum amount of financial assistance in the form of loans provided under the SAFE

instrument shall be EUR 150 000 000 000.

Article 7

Request for financial assistance and European defence industry investment plan

1. Within six months as of the entry into force of this Regulation a Member State

wishing to receive financial assistance shall send a request to the Commission. The

request shall be accompanied by a plan (‘European defence industry investment

plan’).

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2. The European defence industry investment plan shall be duly reasoned and

substantiated. It shall set out the following elements:

(a) description of the defence product and other products for defence purposes

needs related to:

(1) Category one: ammunition and missiles; artillery systems; small drones

(NATO class 1) and related anti-drone systems; critical infrastructure

protection; cyber and military mobility.

(2) Category two: air and missile defence; drones other than small drones

(NATO class 2 and 3) and related anti-drone systems; strategic enablers;

space assets protection; artificial intelligence and electronic warfare.

(b) description of the planned activities, expenditures and measures in accordance

with Article 4;

(c) where relevant, the description of the foreseen involvement of Ukraine in the

planned activities, expenditures and measures, or of foreseen actions for the

benefit of Ukraine;

(d) description of the planned measures aimed at ensuring compliance with Article

16 and procurement rules, including a description of how their respect is to be

ensured; and

(e) any other relevant information.

3. Member States shall indicate, where appropriate, synergies with the European

defence industry investment plans of other Member States, with activities carried out

on the level of the Union.

4. Where relevant, Member States shall include a description of activities to strengthen

security of supply and resilience, in particular by facilitating the access to the

defence market for SMEs, mid-caps and new defence players.

5. When preparing their European defence industry investment plans, Member States

may request the Commission to organise an exchange of good practices in order to

allow the requesting Member States to benefit from the experience of other Member

States.

6. Member States may submit to the Commission an amended request for financial

assistance accompanied by an amended European defence industry investment plan

when duly justified by a change of the planned expenditure or measures and subject

to the availability of loan amounts.

Article 8

Decision on the request for financial assistance

1. The Commission shall assess the European defence industry investment plan referred

to in Article 7(1) and take a decision on that request without undue delay.

2. Where the Commission finds that the request fulfils the conditions laid down in this

Regulation, in particular in Articles 4, 7(2) and 16, the Commission shall make

available the financial assistance by means of an implementing decision. The

Commission implementing decision shall contain:

(a) an assessment of the plan referred to in Article 7(1) including the elements of

the plan referred to in Article 7(2);

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(b) the amount of the loan and the amount of the loan support to be paid in form of

pre-financing in accordance with Article 11;

3. The Commission shall in all cases communicate its assessment of the request to the

Member State concerned, providing it with reasons for its assessment.

4. When adopting an implementing decision pursuant to paragraph 2, the Commission

shall consider existing and expected financing needs of the requesting Member State,

as well as requests for financial assistance pursuant to this Regulation already

submitted or planned to be submitted by other Member States, while applying the

principles of equal treatment, solidarity, proportionality and transparency.

5. Where following the adoption of the implementing decision referred to in paragraph

2, amounts remain available for the financial assistance under the SAFE instrument,

the Commission may publish a new call for expression of interest by 31 December

2026. In such a case, the procedure set out in Article 7 and in paragraphs 1 to 4 shall

apply mutatis mutandis.

6. An implementing decision pursuant to paragraph 2 may be adopted until 30 June

2027.

Article 9

Borrowing and lending operations

1. In order to finance support under the SAFE instrument in the form of loans, the

Commission shall be empowered, on behalf of the Union, to borrow the necessary

funds on the capital markets or from financial institutions in accordance with Article

224 of Regulation (EU, Euratom) 2024/2509.

2. The borrowing and lending operations under the SAFE instrument shall be carried

out in euros.

Article 10

Loan agreement and operational arrangements

1. Upon adoption of the Commission implementing decision referred to in Article 8(2),

the Commission shall enter into a loan agreement and operational arrangements with

the Member State.

2. The loan agreement shall lay down the availability period and the detailed terms of

the support under the SAFE instrument in the form of loans. The loan agreement

shall have a maximum duration of 45 years. In addition to the elements laid down in

Article 223(4) of Regulation (EU, Euratom) 2024/2509, the loan agreement shall

contain the amount of pre-financing and rules on clearing of pre-financing.

3. The operational arrangements shall set out the relationship between the

implementation of a European defence industry investment plan and the

corresponding financial assistance, including a tentative schedule of disbursement of

the loan instalments, with yearly ceiling as appropriate. In addition, these operational

arrangements shall set out types of documentary evidence and control rules related to

the fulfilment of the specific eligibility rules applied by the Member States in

accordance with Article 16, and the detailed elements referred to in Article 14.

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Article 11

Pre-financing

1. Member States may request, as part of their European defence industry investment

plan, a pre-financing payment of an amount of up to 15 percent of the loan support.

2. The disbursement of pre-financing shall be subject to the entry into force of the loan

agreement referred to in Article 10(2). The loan agreement may provide that payment

of pre-financing is conditional upon conclusion of the operational arrangements

referred to in Article 10(3).

3. The payments shall be made subject to the availability of funding. The pre-financing

may be disbursed in one or more tranches.

Article 12

Rules on payments of instalments and suspension of loans

1. The period of availability of the loan which corresponds to the period during which

payments to the Member State concerned under this Article may be approved, shall

be until 31 December 2030. Payments shall be made in instalments, subject to the

availability of funding. An instalment may be disbursed in one or more tranches.

2. Upon submission of the progress report referred to in Article 14(2), the Member

State concerned may submit to the Commission a duly justified request for payment.

Such request for payment may be submitted by the Member States to the

Commission twice a year.

3. The Commission shall assess without undue delay the completeness, correctness and

coherence of the progress report referred to in Article 14(2). Where the Commission

makes a positive assessment, it shall adopt without undue delay a decision

authorising the disbursement of the loan instalment.

4. Where, as a result of the assessment referred to in paragraph 3, the Commission

concludes that the report referred to in Article 14(2) is unsatisfactory, the payment of

all or part of the loan shall be suspended. The Member State concerned may present

its observations within one month of the communication of the Commission’s

assessment.

Article 13

Prudential rules applicable to the portfolio of loans

The share of loans granted to the three Member States representing the largest share of the

loans granted shall not exceed 60 per cent of the maximum amount referred to in Article 6(1).

Article 14

Control and audits

1. The loan agreement shall contain the necessary provisions regarding controls and

audits as required by Article 223(4) of Regulation (EU, Euratom) 2024/2509.

2. Where a duly justified request for payment is submitted in accordance with Article

12, the beneficiary Member State shall also submit to the Commission the six-

monthly progress report duly justifying incurred and upcoming expenditure and other

necessary elements.

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Article 15

Reporting

1. The Commission shall provide the European Parliament and the Council with an

annual report on the use of financial assistance.

2. Where appropriate, the report shall be accompanied by a proposal for the extension

of the period of availability of the SAFE instrument.

Article 16

Eligibility rules on common procurement supporting defence industry investments

1. Common procurements shall be eligible for support under the SAFE instrument only

if they comply with the eligibility conditions set out in this Article.

2. Common procurement procedures and contracts of defence products shall include the

participation requirements for contractors and subcontractors involved in the

common procurement set out in paragraphs 3 to 11 and 13, without prejudice to

conditions agreed in agreements referred to in Article 17.

3. Contractors and subcontractors involved in the common procurement shall be

established and have their executive management structures in the Union, EEA

EFTA State or Ukraine. They shall not be subject to control by a third country which

is not Ukraine nor an EEA EFTA State or by another third-country entity which is

not established in the Union, in Ukraine or in an EEA-EFTA State.

4. By way of derogation from paragraph 3, a legal entity established in the Union and

controlled by another third country or by another third-country entity may participate

in the common procurement if it has been subject to screening within the meaning of

Regulation (EU) 2019/452 of the European Parliament and of the Council and, where

necessary, to appropriate mitigation measures, or if it provides guarantees verified by

the Member State in which the contractor or subcontractor involved in the common

procurement is established. The guarantees shall provide assurances that the

involvement of the contractor or subcontractor in the common procurement does not

contravene the security and defence interests of the Union, and the Member States as

established in the framework of the common foreign and security policy pursuant to

Title V of the TEU.

5. The guarantees referred to in paragraph 4 may be based on a standardised template

provided by the Commission and shall be part of the tender specifications, in order to

ensure a harmonised approach throughout the Union. The guarantees shall, in

particular, substantiate that, for the purposes of the common procurement, measures

are in place to ensure that:

(a) control over the contractor or subcontractor involved in the common

procurement is not exercised in a manner that restrains or restricts its ability to

fulfil the order and to deliver results; and

(b) access by a third country or by a third-country entity to classified information

relating to the common procurement is prevented and the employees or other

persons involved in the common procurement have a national security

clearance issued by a Member State in accordance with national laws and

regulations.

6. The contracting authority conducting the common procurement shall provide the

Commission with a notification on the mitigation measures applied within the

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meaning of Regulation (EU) 2019/452 or the guarantees referred to in paragraph 4.

Further information on the mitigation measures applied or the guarantees shall be

made available to the Commission upon request.

7. The infrastructure, facilities, assets and resources of the contractors and

subcontractors involved in the common procurement which are used for the purposes

of the common procurement shall be located in the territory of a Member State, an

EEA EFTA State, or Ukraine. Where contractors or subcontractors involved in the

common procurement have no readily available alternatives or relevant

infrastructure, facilities, assets and resources on the territory of a Member State, an

EEA EFTA State, or Ukraine, they may use their infrastructure, facilities, assets and

resources which are located or held outside those territories, provided that such use

does not contravene the security and defence interests of the Union and its Member

States.

8. The cost of components originating in the Union, in EEA EFTA States or Ukraine

shall not be lower than 65 % of the estimated cost of the end product. No component

shall be sourced from another third country that contravenes the security and defence

interests of the Union or its Member States.

9. For defence products related to category two as referred to in point (a) (2) of Article

7(4), contractors shall have the ability to decide, without restrictions imposed by

third countries or by third-country entities, on the definition, adaptation and

evolution of the design of the defence product procured, including the legal authority

to substitute or disassemble components that are subject to restrictions imposed by

third countries or by third-country entities.

10. For the purposes of this Article, ‘subcontractors involved in the common

procurement’ means any legal entity which provides critical inputs that possess

unique attributes essential for the functioning of a product and which is allocated at

least 15 % of the value of the contract.

11. Member States shall ensure that the procurement procedures and contracts for other

products for defence purpose resulting from the common procurement receiving

support under this Instrument contain appropriate eligibility conditions to protect the

security and defence interests of the Union and the Member States.

12. Member States shall detail, in the plan referred to in Article 7, eligibility conditions

in line with paragraphs 3 to 11 and 13, without prejudice to conditions agreed in

agreements referred to in Article 17. Financial assistance shall be conditional upon

presentation with the progress report of information indicated in the operational

arrangements referred to in Article 10.

13. Member States may use the financial assistance provided under the SAFE instrument

to finance their participation in procurement procedures carried out in accordance

with Article 168(2) or (3) of Regulation (EU, Euratom) 2024/2509. In this case, by

way of derogation from Article 168(2) and (3) of Regulation (EU, Euratom)

2024/2509, third countries participating in the common procurement may also

participate in and benefit from any procurement mechanisms set out in Article 168(2)

and (3) of Regulation (EU, Euratom) 2024/2509.

EN 24 EN

Article 17

Conditions for the participation of other third countries entities and products

1. The Union may conclude bilateral or multilateral agreements with like-minded

countries, namely acceding countries, candidate countries other than Ukraine and

potential candidates, and other third countries with whom the Union has entered a

Security and Defence Partnership (NBI) in order to open the eligibility conditions

referred to in Article 16 to the possibility to fulfil the criterion of location, origin or

place of establishment to those countries and their territories, in accordance with

paragraphs 2 and 3, whenever these countries participate in a common procurement

under the SAFE instrument.

2. The bilateral or multilateral agreement referred to in paragraph 1 shall specify which

of the eligibility conditions referred to in Article 16 are opened to being fulfilled

through location, origin or place of establishment in the third country or third

countries that are parties to the Agreement, and their territories, and under which

conditions. It shall lay down, in particular and where appropriate:

(a) the conditions and modalities of participation of contractors and subcontractors

established in the third country in the common procurement under the SAFE

instrument;

(b) the rules related to the location of the infrastructure, facilities, assets and

resources of the contractors or subcontractors involved in the common

procurement which are used for production of defence products or other

products for defence purposes supplied under the contracts resulting from

common procurements under the SAFE instrument;

(c) the rules related to the costs of components originating in the third country;

(d) the rules related to restrictions imposed by third countries or by third country

entities, on the definition, adaptation and evolution of the design of the defence

product procured with the support of the SAFE instrument.

3. The bilateral or multilateral agreement shall:

(a) ensure a fair balance as regards the contributions and benefits of the third

country;

(b) lay down the conditions of any financial contribution to be provided by the

third country to the Union;

(c) lay down any other appropriate measures governing the security of supply of

the procured product.

(d) contribute to an increase in the standardisation of defence systems and a greater

interoperability between Member States’ and these other third countries’

capabilities.

4. The contributions referred to in point (b) of paragraph 3 shall constitute external

assigned revenues in accordance with Article 21(5) of the Financial Regulation and

shall be used for programmes supporting the Union defence industry, the Ukrainian

defence industry and Ukraine in accordance with the rules of those programmes.

EN 25 EN

Article 18

Modification of framework agreements or contracts

1. Where a common procurement is supported by the SAFE instrument, the rules

provided for in paragraphs 2 to 4 shall apply to an existing framework agreement or

contract that has as its object the purchase of defence products, is financed at least by

one of the participating Member States in full or in part with the loan awarded under

the SAFE instrument, and do not include rules governing the possibility to

substantially amend it. When applying paragraphs 2 and 3, the contracting authority

that concluded the framework agreement or contract shall obtain the prior agreement

of the undertaking with which it has concluded the framework agreement or contract.

2. A contracting authority of a Member State may modify an existing framework

agreement or contract for defence products, where that framework agreement has

been concluded with an undertaking complying with criteria equivalent to those laid

down in Article 16(3) to (11), in order to add new contracting authorities from

countries participating in the common procurement as parties to that framework

agreement or contract. Article 29(2), first subparagraph, of Directive 2009/81/EC,

shall not apply to the contracting authorities not originally party to the framework

agreement.

3. By way of derogation from Article 29(2), third subparagraph, of Directive

2009/81/EC, a contracting authority of a Member State may make substantial

amendments to the quantities set out in a framework agreement or contract, with an

estimated value above the thresholds laid down in Article 8 of Directive 2009/81/EC,

where that the framework agreement or contract has been concluded with an

undertaking complying with criteria equivalent to those laid down in Article 16(3) to

(11) of this Regulation, and insofar as the modification is strictly necessary for the

application of paragraph 2.

4. For the purpose of the calculation of the value referred to in paragraph 3, the updated

value shall be the reference point when the contract includes an indexation clause.

5. A contracting authority which has modified a framework agreement or contract in

the cases referred to in paragraph 2 or 3 shall publish a notice to that effect in the

Official Journal of the European Union in accordance with Article 32 of Directive

2009/81/EC.

6. In the cases referred to in paragraphs 2 and 3, the principle of equal rights and

obligations shall apply between the contracting authorities which are party to the

framework agreement or contract, in particular regarding the cost of additional

quantities procured.

Article 19

Cases justifying use of the negotiated procedure without publication of a contract notice

in the context of a common procurement supported by the SAFE instrument

Common procurements involving at least one Member State receiving financial assistance

under the SAFE instrument shall be deemed to satisfy the condition of urgency resulting from

a crisis for the purposes of Article 28(1), point (c) of Directive 2009/81/CE.

EN 26 EN

Article 20

Temporary VAT exemption on importation and supply of defence products

For the purpose of this Regulation, the supplies, including importation and intra-Union

supplies, of defence products or other products for defence purpose which are supplied under

contracts resulting from common procurements under the SAFE Instrument shall be

temporarily exempted from the value added tax by derogation to Article 2(1) of the Directive

2006/112/EC.

Article 21

Application of the rules on classified information and sensitive information

1. The Commission shall use a secured exchange system in order to facilitate the

exchange of classified information and sensitive information between the

Commission and the Member States and, where appropriate, with the contractors or

other final recipients.

2. The Commission shall have access to information, including classified information,

strictly necessary for the purpose of verifying conditions for disbursement of

payments and carrying out the checks, reviews, audits, investigations, as well as the

controls, audits and reports, as referred to in Article 14.

Article 22

Information, communication and publicity

1. The Commission and the Member States may engage in communication activities to

ensure the visibility of the Union for the financial assistance envisaged in the

relevant European defence investment plans, including through joint communication

activities with the national authorities concerned, while duly taking into account

security requirements. The Commission may, as appropriate, ensure that support

under this Instrument is communicated and acknowledged through a funding

statement.

2. The Member States benefitting from the financial assistance under the SAFE

instrument shall ensure the visibility of the Union financial assistance, while duly

taking into account security requirements, including, where applicable, by displaying

the emblem of the Union and an appropriate funding statement that reads ‘supported

by the European Union – SAFE’, in particular when promoting the common

procurements and their results, by providing coherent, effective and proportionate

targeted information to multiple audiences, including the media and the public.

3. The Commission shall implement information and communication actions relating to

the Instrument, to actions taken pursuant to the Instrument and to the results

obtained. The Commission shall, where appropriate, inform the representation

offices of the European Parliament of its actions and involve them in those actions.

Article 23

Entry into force

This Regulation shall enter into force on the day following that of its publication in the

Official Journal of the European Union.

EN 27 EN

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President

EN 1 EN

LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT

1. FRAMEWORK OF THE PROPOSAL/INITIATIVE ................................................. 3

1.1. Title of the proposal/initiative ...................................................................................... 3

1.2. Policy area(s) concerned .............................................................................................. 3

1.3. Objective(s) .................................................................................................................. 3

1.3.1. General objective(s) ..................................................................................................... 3

1.3.2. Specific objective(s) ..................................................................................................... 3

1.3.3. Expected result(s) and impact ...................................................................................... 3

1.3.4. Indicators of performance ............................................................................................ 3

1.4. The proposal/initiative relates to: ................................................................................. 4

1.5. Grounds for the proposal/initiative .............................................................................. 4

1.5.1. Requirement(s) to be met in the short or long term including a detailed timeline for

roll-out of the implementation of the initiative ............................................................ 4

1.5.2. Added value of EU involvement (it may result from different factors, e.g.

coordination gains, legal certainty, greater effectiveness or complementarities). For

the purposes of this section 'added value of EU involvement' is the value resulting

from EU action, that is additional to the value that would have been otherwise

created by Member States alone. ................................................................................. 4

1.5.3. Lessons learned from similar experiences in the past .................................................. 4

1.5.4. Compatibility with the multiannual financial framework and possible synergies with

other appropriate instruments ....................................................................................... 5

1.5.5. Assessment of the different available financing options, including scope for

redeployment ................................................................................................................ 5

1.6. Duration of the proposal/initiative and of its financial impact .................................... 6

1.7. Method(s) of budget implementation planned ............................................................. 6

2. MANAGEMENT MEASURES................................................................................... 8

2.1. Monitoring and reporting rules .................................................................................... 8

2.2. Management and control system(s) ............................................................................. 8

2.2.1. Justification of the budget implementation method(s), the funding implementation

mechanism(s), the payment modalities and the control strategy proposed .................. 8

2.2.2. Information concerning the risks identified and the internal control system(s) set up

to mitigate them............................................................................................................ 8

2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio between

the control costs and the value of the related funds managed), and assessment of the

expected levels of risk of error (at payment & at closure) ........................................... 8

2.3. Measures to prevent fraud and irregularities ................................................................ 9

3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE ............ 10

3.1. Heading(s) of the multiannual financial framework and expenditure budget line(s)

affected ....................................................................................................................... 10

EN 2 EN

3.2. Estimated financial impact of the proposal on appropriations ................................... 12

3.2.1. Summary of estimated impact on operational appropriations.................................... 12

3.2.1.1. Appropriations from voted budget ............................................................................. 12

3.2.1.2. Appropriations from external assigned revenues ....................................................... 17

3.2.2. Estimated output funded from operational appropriations......................................... 22

3.2.3. Summary of estimated impact on administrative appropriations ............................... 24

3.2.3.1. Appropriations from voted budget .............................................................................. 24

3.2.3.2. Appropriations from external assigned revenues ....................................................... 24

3.2.3.3. Total appropriations ................................................................................................... 24

3.2.4. Estimated requirements of human resources.............................................................. 25

3.2.4.1. Financed from voted budget....................................................................................... 25

3.2.4.2. Financed from external assigned revenues ................................................................ 26

3.2.4.3. Total requirements of human resources ..................................................................... 26

3.2.5. Overview of estimated impact on digital technology-related investments ................ 28

3.2.6. Compatibility with the current multiannual financial framework.............................. 28

3.2.7. Third-party contributions ........................................................................................... 28

3.3. Estimated impact on revenue ..................................................................................... 29

4. DIGITAL DIMENSIONS .......................................................................................... 29

4.1. Requirements of digital relevance .............................................................................. 30

4.2. Data ............................................................................................................................ 30

4.3. Digital solutions ......................................................................................................... 31

4.4. Interoperability assessment ........................................................................................ 31

4.5. Measures to support digital implementation .............................................................. 32

EN 3 EN

1. FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1. Title of the proposal/initiative

Proposal for a COUNCIL REGULATION establishing the Security Action For

Europe (SAFE) through the Reinforcement of European Defence Industry Instrument

1.2. Policy area(s) concerned

Defence industry

1.3. Objective(s)

1.3.1. General objective(s)

Not applicable.

The proposed Regulation is an emergency measure put forward by the Commission

to the Council with a view to provide Union financial assistance to Member States in

a spirit of solidarity in order to help them to carry out urgent and major public

investments to support the European defence industry.

1.3.2. Specific objective(s)

Specific objective No

Not applicable

1.3.3. Expected result(s) and impact

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.

The aim of the proposed SAFE instrument is to lay down the rules enabling the

Union to provide financial assistance to a Member State, which is experiencing, or is

seriously threatened with, a severe economic disturbance caused by Russia’s

unprovoked and unjustified war of aggression against Ukraine.

Specifically, the SAFE instrument provides financial assistance for activities,

expenditures and measures related to defence products carried out through common

procurement aiming at:

(a) speeding up, in a collaborative manner, the adjustment of defence industry to

structural changes, including through the creation and ramp-up of its manufacturing

capacities as well as related supporting activities;

(b) improving the timely availability of defence products, including through the

reduction of their delivery lead time, reservation of manufacturing slots or

stockpiling of defence products, intermediate products or raw materials;

(c) ensuring interoperability and interchangeability across Europe; and

It sets out the conditions and procedures for providing and implementation the

financial assistance under the Instrument by the Member States, and for

simplification and acceleration of the procedures of common procurement.

1.3.4. Indicators of performance

Specify the indicators for monitoring progress and achievements.

EN 4 EN

1.4. The proposal/initiative relates to:

 a new action

 a new action following a pilot project / preparatory action12

 the extension of an existing action

 a merger or redirection of one or more actions towards another/a new action

1.5. Grounds for the proposal/initiative

1.5.1. Requirement(s) to be met in the short or long term including a detailed timeline for

roll-out of the implementation of the initiative

The proposed SAFE instrument is based on Article 122 (1) and (2) TFEU.

This legal basis prescribes that:

- appropriate measures can be taken by the Union to respond in a spirit of solidarity

between Member States to a specific economic situation.

- Union financial assistance can be granted when a Member State is faced with

difficulties or threatened by difficulties caused by an exceptional occurrence beyond

its control but subject to conditions.

Currently, Member States are facing a severe economic disturbance caused by

Russia’s unprovoked and unjustified war of aggression against Ukraine which has

strong negative socio-economic impacts in Member States .

1.5.2. Added value of EU involvement (it may result from different factors, e.g.

coordination gains, legal certainty, greater effectiveness or complementarities). For

the purposes of this section 'added value of EU involvement' is the value resulting

from EU action, that is additional to the value that would have been otherwise

created by Member States alone.

The proposal aims to offer financial support in a spirit of European solidarity with

those Member States that are heavily affected. Such financial assistance supports on

a temporary basis Member States’ increased public expenditure as is by means of

loans in order to help them to carry out urgent and major public investments to

support the European defence industry.

The Instrument should allow to carry out urgent and major public investments to the

European defence industry aiming at rapid increase of its production capacity,

improvement of the timely availability of defence products, speeding up and

adjustment to structural changes as well as the industrial development of new

defence products or the upgrading of existing ones, to accompany their effort to

rapidly increase the production capacity of the European defence industry, thus

improving the supply of defence products..

1.5.3. Lessons learned from similar experiences in the past

When the Union was confronted with a grave financial crisis a decade ago, the legal

basis of Article 122 of the Treaty on the Functioning of the European Union (TFEU)

has proven it is added value to mobilise at short notice financial assistance from the

Union to Member States faced with difficulties caused by an exceptional event

12 As referred to in Article 58(2), point (a) or (b) of the Financial Regulation.

EN 5 EN

beyond their control. The Union adopted on this legal basis Regulation (EU) No

407/2010 of the Council of 11 May 2010 establishing a European Financial

Stabilisation Mechanism (EFSM). This instrument provided Union financial

assistance to Portugal, Ireland and a bridge financing to Greece by means of back-to-

back-loans. This legal basis has also been used to provide financial assistance to

Member States that were facing severe economic disturbance caused by the COVID-

19 crisis for the financing of short-time work or similar measures aimed to protect

employees and self-employed and thus reduce the incidence of unemployment

(SURE).

The legal basis and the technique are however not confined to financial crisis or

health crisis events only but to any exceptional occurrence beyond Member States’

control and could therefore also be used in this particular crisis event of the current

security situation and the impact it has on the European economy.

1.5.4. Compatibility with the multiannual financial framework and possible synergies with

other appropriate instruments

The proposed SAFE instrument complements the Union support to Ukraine

initiatives, in particular the Ukraine Facility, and the emergency instruments in

support of European defence industry adopted in response of Russia’s war of

aggression against Ukraine, in particular the ASAP Regulation, EDIRPA Regulation

and the upcoming EDIP Regulation.

1.5.5. Assessment of the different available financing options, including scope for

redeployment

Not applicable

EN 6 EN

1.6. Duration of the proposal/initiative and of its financial impact

 limited duration

–  in effect from [DD/MM]2025 to [31/12]2030

–  financial impact from YYYY to YYYY for commitment appropriations and

from YYYY to YYYY for payment appropriations.

 unlimited duration

– Implementation with a start-up period from YYYY to YYYY,

– followed by full-scale operation.

1.7. Method(s) of budget implementation planned13

 Direct management by the Commission

–  by its departments, including by its staff in the Union delegations;

–  by the executive agencies

 Shared management with the Member States

 Indirect management by entrusting budget implementation tasks to:

–  third countries or the bodies they have designated

–  international organisations and their agencies (to be specified)

–  the European Investment Bank and the European Investment Fund

–  bodies referred to in Articles 70 and 71 of the Financial Regulation

–  public law bodies

–  bodies governed by private law with a public service mission to the extent that

they are provided with adequate financial guarantees

–  bodies governed by the private law of a Member State that are entrusted with

the implementation of a public-private partnership and that are provided with

adequate financial guarantees

–  bodies or persons entrusted with the implementation of specific actions in the

common foreign and security policy pursuant to Title V of the Treaty on

European Union, and identified in the relevant basic act

– bodies established in a Member State, governed by the private law of a

Member State or Union law and eligible to be entrusted, in accordance with

sector-specific rules, with the implementation of Union funds or budgetary

guarantees, to the extent that such bodies are controlled by public law bodies or

by bodies governed by private law with a public service mission, and are provided

with adequate financial guarantees in the form of joint and several liability by the

controlling bodies or equivalent financial guarantees and which may be, for each

action, limited to the maximum amount of the Union support.

Comments

13 Details of budget implementation methods and references to the Financial Regulation may be found on

the BUDGpedia site: https://myintracomm.ec.europa.eu/corp/budget/financial-rules/budget-

implementation/Pages/implementation-methods.aspx.

EN 7 EN

The proposed Regulation is based on Article 122 TFEU. Hence, it can only be of a temporary

nature. Giving the need to swiftly place orders with the European defence industry and to

ensure industrial capacity building, this Regulation should be limited to 5 years.

EN 8 EN

2. MANAGEMENT MEASURES

2.1. Monitoring and reporting rules

The proposed Regulation provides for a reporting clause (Article 15). The

Commission should forward to the European Parliament and the Council, within one

year following the entry into force of this Regulation and where appropriate every

year thereafter, a report on the use of financial assistance and continuation of the

exceptional occurrences that justify the adoption and application of this Regulation.

2.2. Management and control system(s)

2.2.1. Justification of the budget implementation method(s), the funding implementation

mechanism(s), the payment modalities and the control strategy proposed

The proposed Regulation lays down prudential rules to manage the risks related to

the loan portfolio (Articles 12, 13 and 14

2.2.2. Information concerning the risks identified and the internal control system(s) set up

to mitigate them

2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio between

the control costs and the value of the related funds managed), and assessment of the

expected levels of risk of error (at payment & at closure)

2.3. Measures to prevent fraud and irregularities

The proposed Regulation lays down control and audit rules (Article 14). The

Commission shall ensure that the necessary provisions regarding controls and audits

are provided for in the agreement concluded with the beneficiary Member State for

the purposes of implementing Union financial assistance under the SAFE instrument.

The rules of Article 220 of the Financial Regulation apply.

EN 9 EN

3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE

3.1. Heading(s) of the multiannual financial framework and expenditure budget line(s) affected

• Existing budget lines

In order of multiannual financial framework headings and budget lines.

Heading of

multiannual

financial

framework

Budget line Type of

expenditure Contribution

Number

Diff./Non-

diff.14

from

EFTA

countries 15

from

candidate

countries

and

potential

candidates 16

From

other

third

countries

other assigned

revenue

[XX.YY.YY.YY]

Diff./Non

-diff. YES/NO YES/NO YES/NO YES/NO

[XX.YY.YY.YY]

Diff./Non

-diff. YES/NO YES/NO YES/NO YES/NO

[XX.YY.YY.YY]

Diff./Non

-diff. YES/NO YES/NO YES/NO YES/NO

3.2. Estimated financial impact of the proposal on appropriations

3.2.1. Summary of estimated impact on operational appropriations

–  The proposal/initiative does not require the use of operational appropriations

14 Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations. 15 EFTA: European Free Trade Association. 16 Candidate countries and, where applicable, potential candidates from the Western Balkans.

EN 10 EN

–  The proposal/initiative requires the use of operational appropriations, as explained below

3.2.1.1. Appropriations from voted budget

EUR million (to three decimal places)

Heading of multiannual financial framework 5 Security and Defence

DG DEFIS Year Year Year Year TOTAL MFF

2021-2027 2024 2025 2026 2027

TOTAL operational appropriations

Commitments (4) 0.000 0.000 0.000 0.000 0.000

Payments (5) 0.000 0.000 0.000 0.000 0.000

TOTAL appropriations of an administrative nature financed

from the envelope for specific programmes (6) 0.000 0.000 0.000 0.000 0.000

TOTAL appropriations under

HEADING 5 Commitments =4+6 0.000 0.000 0.000 0.000 0.000

of the multiannual financial framework Payments =5+6 0.000 0.000 0.000 0.000 0.000

Year Year Year Year TOTAL MFF

2021-2027 2024 2025 2026 2027

• TOTAL operational appropriations (all

operational headings)

Commitments (4) 0.000 0.000 0.000 0.000 0.000

Payments (5) 0.000 0.000 0.000 0.000 0.000

• TOTAL appropriations of an administrative nature financed

from the envelope for specific programmes (all operational

headings)

(6) 0.000 0.000 0.000 0.000 0.000

TOTAL appropriations Under

Heading 1 to 6 Commitments =4+6 0.000 0.000 0.000 0.000 0.000

of the multiannual financial framework

(Reference amount) Payments =5+6 0.000 0.000 0.000 0.000 0.000

EN 11 EN

Heading of multiannual financial framework 7 ‘Administrative expenditure’17

DG DEFIS Year Year Year Year TOTAL

MFF 2021-

2027 2024 2025 2026 2027

 Human resources 0.000 4.512 6.768 6.768 18.048

 Other administrative expenditure 0.000 0.046 0.100 0.100 0.246

TOTAL DG DEFIS Appropriations 0.000 4.558 6.868 6.868 18.294

DG BUDG Year Year Year Year TOTAL

MFF 2021-

2027 2024 2025 2026 2027

 Human resources 0.000 0.376 0.376 0.376 1.128

 Other administrative expenditure 0.000 0.000 0.000 0.000 0.000

TOTAL DG BUDG Appropriations 0.000 0.376 0.376 0.376 1.128

TOTAL appropriations under HEADING 7 of the multiannual financial

framework

(Total

commitments

= Total

payments)

0.000 4.934 7.244 7.244 19.422

EUR million (to three decimal places)

Year Year Year Year TOTAL MFF

2021-2027 2024 2025 2026 2027

TOTAL appropriations under HEADINGS 1 to 7 Commitments 0.000 4.934 7.244 7.244 19.422

17 The necessary appropriations should be determined using the annual average cost figures available on the appropriate BUDGpedia webpage.

EN 12 EN

of the multiannual financial framework Payments 0.000 4.934 7.244 7.244 19.422

3.2.2. Estimated output funded from operational appropriations (not to be completed for decentralised agencies)

Commitment appropriations in EUR million (to three decimal places)

Indicate

objectives and

outputs



Year 2024

Year 2025

Year 2026

Year 2027

Enter as many years as necessary to show the

duration of the impact (see Section1.6) TOTAL

OUTPUTS

Type18

Avera

ge

cost

N o

Cost N o

Cost N o

Cost N o

Cost N o

Cost N o

Cost N o

Cost Total

No

Total

cost

SPECIFIC OBJECTIVE No 119…

- Output

- Output

- Output

Subtotal for specific objective No 1

SPECIFIC OBJECTIVE No 2 ...

- Output

Subtotal for specific objective No 2

TOTALS

18 Outputs are products and services to be supplied (e.g. number of student exchanges financed, number of km of roads built, etc.). 19 As described in Section 1.3.2. ‘Specific objective(s)’

EN 13 EN

3.2.3. Summary of estimated impact on administrative appropriations

–  The proposal/initiative does not require the use of appropriations of an

administrative nature

–  The proposal/initiative requires the use of appropriations of an administrative

nature, as explained below

3.2.3.1. Appropriations from voted budget

VOTED APPROPRIATIONS Year Year Year Year TOTAL

2021 - 2027 2024 2025 2026 2027

HEADING 7

Human resources 0.000 4.888 7.144 7.144 19.176

Other administrative expenditure 0.000 0.046 0.100 0.100 0.246

Subtotal HEADING 7 0.000 4.934 7.244 7.244 19.422

Outside HEADING 7

Human resources 0.000 0.000 0.000 0.000 0.000

Other expenditure of an administrative nature 0.000 0.000 0.000 0.000 0.000

Subtotal outside HEADING 7 0.000 0.000 0.000 0.000 0.000

TOTAL 0.000 4.934 7.244 7.244 19.422

3.2.3.2. Appropriations from external assigned revenues

EXTERNAL ASSIGNED REVENUES Year Year Year Year TOTAL

2021 - 2027 2024 2025 2026 2027

HEADING 7

Human resources 0.000 0.000 0.000 0.000 0.000

Other administrative expenditure 0.000 0.000 0.000 0.000 0.000

Subtotal HEADING 7 0.000 0.000 0.000 0.000 0.000

Outside HEADING 7

Human resources 0.000 0.000 0.000 0.000 0.000

Other expenditure of an administrative nature 0.000 0.000 0.000 0.000 0.000

Subtotal outside HEADING 7 0.000 0.000 0.000 0.000 0.000

TOTAL 0.000 0.000 0.000 0.000 0.000

3.2.3.3. Total appropriations

TOTAL

VOTED APPROPRIATIONS

+

EXTERNAL ASSIGNED REVENUES

Year Year Year Year TOTAL

2021 -

2027 2024 2025 2026 2027

HEADING 7

Human resources 0.000 4.888 7.144 7.144 19.176

Other administrative expenditure 0.000 0.046 0.100 0.100 0.246

Subtotal HEADING 7 0.000 4.934 7.244 7.244 19.422

Outside HEADING 7

EN 14 EN

Human resources 0.000 0.000 0.000 0.000 0.000

Other expenditure of an administrative nature 0.000 0.000 0.000 0.000 0.000

Subtotal outside HEADING 7 0.000 0.000 0.000 0.000 0.000

TOTAL 0.000 4.934 7.244 7.244 19.422

The appropriations required for human resources and other expenditure of an administrative nature

will be met by appropriations from the DG that are already assigned to management of the action

and/or have been redeployed within the DG, together, if necessary, with any additional allocation

which may be granted to the managing DG under the annual allocation procedure and in the light of

budgetary constraints.

3.2.4. Estimated requirements of human resources

–  The proposal/initiative does not require the use of human resources

–  The proposal/initiative requires the use of human resources, as explained

below

3.2.4.1. Financed from voted budget

Estimate to be expressed in full-time equivalent units (FTEs)20

VOTED APPROPRIATIONS

Year Year Year Year Years

2024 2025 2026 2027 2028-

2030

 Establishment plan posts (officials and temporary staff)

20 01 02 01 (Headquarters and Commission’s Representation Offices) 0 26 38 38 38

20 01 02 03 (EU Delegations) 0 0 0 0 0

01 01 01 01 (Indirect research) 0 0 0 0 0

01 01 01 11 (Direct research) 0 0 0 0 0

Other budget lines (specify) 0 0 0 0 0

• External staff (inFTEs)

20 02 01 (AC, END from the ‘global envelope’) 0 0 0 0 0

20 02 03 (AC, AL, END and JPD in the EU Delegations) 0 0 0 0 0

Admin. Support line

[XX.01.YY.YY]

- at Headquarters 0 0 0 0 0

- in EU Delegations 0 0 0 0 0

01 01 01 02 (AC, END - Indirect research) 0 0 0 0 0

01 01 01 12 (AC, END - Direct research) 0 0 0 0 0

Other budget lines (specify) - Heading 7 0 0 0 0 0

Other budget lines (specify) - Outside Heading 7 0 0 0 0 0

TOTAL 0 26 38 38 38

20 Please specify below the table how many FTEs within the number indicated are already assigned to the

management of the action and/or can be redeployed within your DG and what are your net needs.

EN 15 EN

The number of FTEs here above is the needs of additional resources in order to manage the

activities in DG DEFIS and DG BUDG.

3.2.4.2. Financed from external assigned revenues

EXTERNAL ASSIGNED REVENUES

Year Year Year Year Years

2024 2025 2026 2027 2028-

2030

 Establishment plan posts (officials and temporary staff)

20 01 02 01 (Headquarters and Commission’s Representation Offices) 0 0 0 0 0

20 01 02 03 (EU Delegations) 0 0 0 0 0

01 01 01 01 (Indirect research) 0 0 0 0 0

01 01 01 11 (Direct research) 0 0 0 0 0

Other budget lines (specify) 0 0 0 0 0

• External staff (in full time equivalent units)

20 02 01 (AC, END from the ‘global envelope’) 0 0 0 0 0

20 02 03 (AC, AL, END and JPD in the EU Delegations) 0 0 0 0 0

Admin. Support line

[XX.01.YY.YY]

- at Headquarters 0 0 0 0 0

- in EU Delegations 0 0 0 0 0

01 01 01 02 (AC, END - Indirect research) 0 0 0 0 0

01 01 01 12 (AC, END - Direct research) 0 0 0 0 0

Other budget lines (specify) - Heading 7 0 0 0 0 0

Other budget lines (specify) - Outside Heading 7 0 0 0 0 0

TOTAL 0 0 0 0 0

3.2.4.3. Total requirements of human resources

TOTAL VOTED APPROPRIATIONS

+

EXTERNAL ASSIGNED REVENUES

Year Year Year Year Years

2024 2025 2026 2027 2028-

2030

 Establishment plan posts (officials and temporary staff)

20 01 02 01 (Headquarters and Commission’s Representation

Offices) 0 26 38 38 38

20 01 02 03 (EU Delegations) 0 0 0 0 0

01 01 01 01 (Indirect research) 0 0 0 0 0

01 01 01 11 (Direct research) 0 0 0 0 0

Other budget lines (specify) 0 0 0 0 0

• External staff (in full time equivalent units)

20 02 01 (AC, END from the ‘global envelope’) 0 0 0 0 0

20 02 03 (AC, AL, END and JPD in the EU Delegations) 0 0 0 0 0

Admin. Support

line

[XX.01.YY.YY]

- at Headquarters 0 0 0 0 0

- in EU Delegations 0 0 0 0 0

01 01 01 02 (AC, END - Indirect research) 0 0 0 0 0

01 01 01 12 (AC, END - Direct research) 0 0 0 0 0

Other budget lines (specify) - Heading 7 0 0 0 0 0

EN 16 EN

Other budget lines (specify) - Outside Heading 7 0 0 0 0 0

TOTAL 0 26 38 38 38

The staff required to implement the proposal (in FTEs):

To be covered by

current staff

available in the

Commission

services

Exceptional additional staff*

To be financed

under Heading 7

or Research

To be financed

from BA line

To be financed

from fees

Establishment

plan posts

38 N/A

External staff

(CA, SNEs, INT)

Description of tasks to be carried out by:

Officials and temporary staff To manage the envelope of loans of € 150 billion, additional staff is needed. The staff

dedicated to the management of the European Defence Fund (EDF) , ASAP and

EDIRPA is already insufficient to manage the EDF/ASAP/EDIRPA programmes.

Here below : a summary of the task

In 2025, General admisitrative, financial and technical support, Coordination and

Implementation, Legal framework design, Phase 1 – Call for “proposals” preparation,

assessment of “proposals”, and preparation of the Council IA decisions (Includes

assesment + “dialogue” with the concerned MS on the proposed measures proposed),

Phase 2 - Loan Agreements Preparation.

In 2026 and 2027, General support, Coordination and Implementation, Legal

framework design, Phase 1 - Call for “proposals” preparation, ,ssessment of

“proposals” and preparation of the Council IA decision (Includes assesment +

“dialogue” with the concerned MS on the proposed measures proposed), Phase 2 -

Loan Agreement Preparation, Phase 3- Monitoring, control, payments and reporting.

External staff

3.2.5. Overview of estimated impact on digital technology-related investments

Compulsory: the best estimate of the digital technology-related investments entailed

by the proposal/initiative should be included in the table below.

Exceptionally, when required for the implementation of the proposal/initiative, the

appropriations under Heading 7 should be presented in the designated line.

The appropriations under Headings 1-6 should be reflected as “Policy IT expenditure

on operational programmes”. This expenditure refers to the operational budget to be

used to re-use/ buy/ develop IT platforms/ tools directly linked to the implementation

of the initiative and their associated investments (e.g. licences, studies, data storage

etc). The information provided in this table should be consistent with details

presented under Section 4 “Digital dimensions”.

EN 17 EN

TOTAL Digital and IT appropriations

Year Year Year Year TOTAL

MFF

2021 -

2027 2024 2025 2026 2027

HEADING 7

IT expenditure (corporate) 0.000 0.000 0.000 0.000 0.000

Subtotal HEADING 7 0.000 0.000 0.000 0.000 0.000

Outside HEADING 7

Policy IT expenditure on operational programmes

0.000 0.000 0.000 0.000 0.000

Subtotal outside HEADING 7 0.000 0.000 0.000 0.000 0.000

TOTAL 0.000 0.000 0.000 0.000 0.000

3.2.6. Compatibility with the current multiannual financial framework

The proposal/initiative:

–  can be fully financed through redeployment within the relevant heading of the

multiannual financial framework (MFF)

The operational budget is not impacted by the regulation.

–  requires use of the unallocated margin under the relevant heading of the MFF

and/or use of the special instruments as defined in the MFF Regulation

–  requires a revision of the MFF

3.2.7. Third-party contributions

The proposal/initiative:

–  does not provide for co-financing by third parties

–  provides for the co-financing by third parties estimated below:

Appropriations in EUR million (to three decimal places)

Year 2024

Year 2025

Year 2026

Year 2027

Total

Specify the co-financing body

TOTAL appropriations co-

financed

3.3. Estimated impact on revenue

–  The proposal/initiative has no financial impact on revenue.

–  The proposal/initiative has the following financial impact:

–  on own resources

–  on other revenue

–  please indicate, if the revenue is assigned to expenditure lines

EN 18 EN

4. DIGITAL DIMENSIONS

4.1. Requirements of digital relevance

Not applicable

4.2. Data

Not applicable

4.3. Digital solutions

4.4. Interoperability assessment

4.5. Measures to support digital implementation

Not applicable

Not applicable

Not applicable.

    Resolutsiooni liik: Riigikantselei resolutsioon Viide: Kaitseministeerium /  / ; Riigikantselei /  / 2-5/25-00555

Resolutsiooni teema: Euroopa julgeolekumeetmete sihtotstarbeline rahastamisvahend – SAFE laenuinstrument

Adressaat: Kaitseministeerium Ülesanne: Tulenevalt Riigikogu kodu- ja töökorra seaduse § 152` lg 1 p 2 ning Vabariigi Valitsuse reglemendi § 3 lg 4 palun valmistada ette Vabariigi Valitsuse seisukoha ja otsuse eelnõu järgneva algatuse kohta, kaasates seejuures olulisi huvigruppe ja osapooli:

- Proposal for a COUNCIL REGULATION establishing the Security Action for Europe (SAFE) through the reinforcement of European defence industry Instrument, COM(2025) 122.

EISi toimiku nr: 25-0130

Tähtaeg: 07.04.2025

Adressaat: Rahandusministeerium, Välisministeerium Ülesanne: Palun esitada oma sisend Kaitseministeeriumile seisukohtade kujundamiseks antud eelnõu kohta (eelnõude infosüsteemi (EIS) kaudu).

Tähtaeg: 02.04.2025

Lisainfo: Eelnõu on kavas arutada valitsuse 17.04.2025 istungil ja Vabariigi Valitsuse reglemendi § 6 lg 6 kohaselt sellele eelneval nädalal (09.04.2025) EL koordinatsioonikogus. Esialgsed materjalid EL koordinatsioonikoguks palume esitada hiljemalt 07.04.2025.

Kinnitaja: Nele Grünberg, Euroopa Liidu asjade direktori asetäitja Kinnitamise kuupäev: 27.03.2025 Resolutsiooni koostaja: Elen Nurme [email protected], 693 5201  

.

26.03.2025

Euroopa julgeolekumeetmete sihtotstarbeline rahastamisvahend – SAFE laenuinstrument

Otsuse ettepanek koordinatsioonikogule

Kujundada seisukoht

Kaasvastutaja sisendi tähtpäev 02.04.2025

KOKi esitamise tähtpäev 09.04.2025

VV esitamise tähtpäev 17.04.2025

Peavastutaja: Kaitseministeerium

Kaasvastutajad: Rahandusministeerium, Välisministeerium

Seisukoha valitsusse toomise alus ja põhjendus

Algatuse vastuvõtmisega kaasneks oluline majanduslik või sotsiaalne mõju (RKKTS § 152¹ lg 1 p 2)

Sisukokkuvõte

4.03.2025 esitas Euroopa Komisjon president Ursula von der Leyen kirjaga Euroopa taasrelvastumise kava ("ReArm Europe") eesmärgiga tõsta kiireloomuliselt Euroopa kaitsevalmidust. 19.03.2025 avaldasid komisjon ja ELi välisasjade ja julgeolekupoliitika kõrge esindaja ka Euroopa kaitsevalmiduse valge raamatu, mis raamistab Euroopa julgeolekut puudutava ohupildi lühikeses ja keskpikas perspektiivis, täpsustab taasrelvastumise kavas sisalduvaid ettepanekuid ning toob ka varasemad kaitsevaldkonda puudutavad ettepanekud ühe katuse alla. Valge raamat tuvastab seitse võimevaldkonda, millele EL (vastavuses NATO kaitseplaanidega) peaks esmajärjekorras keskenduma. Tugeva Euroopa kaitsehoiaku tähtajaks seatakse hiljemalt aastaks 2030, mis omakorda suurendaks Euroopa panust transatlantilisse julgeolekusse.

Uute ettepanekute seas on ka Euroopa julgeolekumeetmete uue sihtotstarbelise rahastamisvahendi ("Security Action for Europe" ehk SAFE laenuinstrument) loomine. 19.03.2025 tuli komisjon vastavalt välja SAFE laenuinstrumendi määrusega (COM (2025) 122). Komisjoni ettepanek on laenata turgudelt ELi üldeelarve manööverdamisruumi tagatisel 150 miljardit ja võimaldada riikidel SAFE laenuinstrumendi kaudu laenu võtta. Vahendid makstakse taotluse korral välja huvitatud liikmesriikidele riiklike kavade alusel.

2

Väljamaksed vormistatakse konkurentsivõimelise hinnaga ja soodsalt struktureeritud pikaajaliste laenudena, mille maksavad tagasi toetust saavad liikmesriigid. 

Vastavalt komisjoni ettepanekule saaks SAFE-i kaudu laenu taotleda ELi liikmesriik vähemalt kahe riigi ühishangetele, kellest vähemalt üks peab olema ELi liikmesriik ja teine võib olla ELi liikmesriik või kandidaatriik, EFTA/EMP riik (Island, Liechtenstein, Norra), Ukraina või kolmas riik, kellega EL on sõlminud kaitse- ja julgeolekupartnerluse lepingu alusel (tänaseks on vastava lepingu ELiga sõlminud Norra, Moldova, Lõuna-Korea, Jaapani, Albaania ja Põhja-Makedoonia). Laenu kaudu saaks rahastada valges raamatus kajastatud ja 6. märtsi Euroopa Ülemkogu järeldustes määratletud prioriteetseid võimeid, st õhu- ja raketikaitse; kahurisüsteemid; laskemoon; droonid ja droonitõrje süsteemid; strateegilised võimestid sealhulgas kosmose ja kriitilise taristu kaitse valdkonnas; küber, AI ja elektrooniline sõjapidamine; sõjaline liikuvus.

SAFE instrumendi määrust on kavas ELi nõukogus menetleda kiirprotseduuriga. Eesmärk on võtta meede lõplikult vastu tänavu juuniks.

Kas EL algatus reguleerib karistusi või haldustrahve? Ei

Kas nähakse ette uue asutuse loomine (järelevalvelised või muud asutused)? Ei

Kas lahenduse rakendamine vajab IT-arendusi? Ei

Eesmärgid

Tõsta Euroopa kaitsevalmidust märkimisväärselt ning kõrvaldada võimelüngad, eeskätt kriitilise tähtsusega võimevaldkondades. Toetada Euroopa kaitsetööstust nõudluse koondamise ja ühishangete kaudu.

Mõju ja sihtrühm

Majandus ja riigikaitse

Sihtrühm: Eesti Kaitse- ja Kosmosetööstuse Liit

Mõju sihtrühmale: SAFE laenuinstrument võib luua ka uusi võimalusi Eesti kaitsetööstuse ettevõtetele, kuna kasvatab nõudlust sh Euroopas toodetud kaitsetoodete järgi ja soodustades ühishankeid. Eesti kaitsetööstuse võimekuse kasvatamine toetab omakorda ka Eesti iseseisva kaitsevõime tugevdamist.

Kaasamine

SAFE instrumendi kiireloomulise menetluse tõttu sihistatult informeerida kaitsetööstuse ja seotud ettevõtteid, sh Eesti Kaitse- ja Kosmosetööstuse Liit.