The European Commission has approved a loan of €787.67 ($920) million for Greece under the new Security Action for Europe (SAFE) program, a key initiative aimed at rapidly strengthening the EU’s defense industrial base.
This financial assistance is part of a larger €150 billion fund designed to help member states procure urgently needed defense equipment and address critical capability gaps.
Purpose and key provisions of the SAFE Program
SAFE is a new financial instrument, not a grant, that provides low-interest, long-term loans to EU member states. Its primary goal is to encourage collective investment and joint procurement to create a more integrated and self-reliant European defense market.
The European Commission raises the funds for the program on capital markets, leveraging the EU’s strong credit rating to secure favorable borrowing terms for participating countries.
Key provisions include:
Joint Procurement: While SAFE can support national procurements in urgent cases, it prioritizes projects involving at least one member state benefiting from the loan and one other partner, which can include another EU country, Ukraine, or a European Economic Area-EFTA country.
Eligibility: To ensure the funds bolster the European defense industry, the program has strict rules. A significant portion of the final product’s value (at least 65%) must originate from within the EU, EEA-EFTA states, or Ukraine.
Financial Terms: The loans offer a long repayment period of up to 45 years and a grace period of up to 10 years before principal payments begin, providing countries with significant fiscal flexibility.
Scope: SAFE supports investments in critical areas, including ammunition, missiles, air and missile defense systems, drones, and military mobility. It also finances the expansion of production lines and supply chains.
Greece’s participation in the EU’s SAFE Program
Greece was an active participant in shaping the SAFE regulation and had requested a total of €1.2 billion. While the final approved amount is slightly lower, it is intended to fund a range of projects that will modernize the Hellenic Armed Forces.
“Our government continues to strengthen the deterrent power and operational capacity of the Armed Forces with planning, responsibility, and strategic vision,” Greek PM Kyriakos Mitsotakis stated in July, when Greece joined SAFE.
“Defense and security are national priorities,” the Prime Minister emphasized, noting that Greece is taking full advantage of EU support tools—many of which it has actively helped to shape. This includes triggering the national escape clause for defense, enabling fiscal flexibility to fully implement the Long-Term Defense Procurement Program, which for the 2025–2036 period amounts to around $33.8 billion.
The initial focus of Greece’s request was on upgrading and procuring military vehicles, particularly armored vehicles and general-purpose trucks, to enhance the mobility of its ground forces.
This loan is expected to accelerate projects that were previously scheduled for later in Greece’s long-term defense plan, providing a significant boost to the country’s defense readiness and supporting its domestic defense industry.
In a broader context, the Greek government views this as a strategic move to deepen cooperation with its European and U.S. allies and to strengthen its military posture in the Eastern Mediterranean.
Related: US Lawmakers Assess Defense Investments in Greece
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