EU accepted the Military Loan Fund, gave 6 months for first orders

The European Union has adopted a new fund on Tuesday, from which it will finance the re -equipment of its members. The Fund, called the Security Action Institute for Europe (Safe), will have a budget of up to EUR 150 billion over the next five years.

When requesting an EU government, the European Commission will raise the money on the world exchanges and provide it against low interest rate. In order to be able to enjoy the money every country that wants it, it will have to offer a national investment plan.

Each order will be mandatory to announce public procurement. They must include two participating countries to be eligible for loans.

« This is an unprecedented tool that will strengthen our defense capabilities and support our defense industry. The more we invest in our security and defense, the better we will discourage those who wish us evil, » said European Poland Minister Adam, whose state is negotiating.

How will the money be given

The mechanism of operation of Safe largely follows the logic of the mechanism of recovery and resilience, by which the recovery from the Covid-19 pandemic is financed, but it does not provide for grant, but only loans.

After the regulation governing the work of the Fund is published in the « Official EU newspaper » on May 28 the states will have six months to submit initial national plans, which the Commission will then evaluate.

Once they approve of the Member States, they will determine the amount of the loan for each country, and up to 15% of the funding will be possible in advance. The European Commission will collect it and give it to the government of the demanding country.

After receiving the money, countries will have to report to the Commission on Execution Commission when they submit their payment requests. A request for money will be able to be submitted twice a year. The latest payment approval can be made by December 31, 2030, the European Commission announced on Tuesday.

Who will be able to borrow

All European countries will have access to the money, as well as Norway, Liechtenstein and Norway, who are members of the European Economic Area, as well as Switzerland.

Britain, which last week has signed an EU defense agreement, will also be included with countries that can participate in public procurement and buy weapons.

The nine countries that are candidates for EU members can also apply for loans.

The door is also left open to other countries that would like to conclude a bilateral or multilateral defense and security agreement with the EU.

What can be bought with Safe

The weapons and ammunition that can be bought with European loans is limited to two groups – ammunition and missiles and missile defense systems, drones and strategic systems.

The first group of ammunition and rockets will include artillery systems, abilities for deeply precision strikes, ground combat capabilities and their supporting systems, infantry weapons, remedies for protection of critical infrastructure and casualties, military mobility.

The second group includes systems for air and missile defense, maritime levels and underwater capabilities, drones and drone control systems; Strategic means, strategic air transport, fuel charging in the air and C4istar systems, as well as space assets and services, space assets, artificial intelligence and electronic warfare.

Choose the European

The contracts in the second group will only be able to be concluded with contractors who are licensed to adapt and develop the design of the purchased defense product, the EU Council emphasizes.

Costs for originating components outside the EU, Norway, Switzerland and Iceland, as well as Ukraine, cannot exceed 35 % of the estimated cost of the final product, according to access to military loans.

On June 4, the European Commission is expected to approve the demands of 14 countries, including Bulgaria, who wished their defense costs not to be included in the calculation of their budget deficits, so that they do not exceed the 3%deficit requirement, over which the European Commission may bring them a criminal procedure for superfittas.

With these funds, countries will be able to implement the second part of the rearmament program, which provides for € 650 billion to be taken from national treasury.