What happened: With approval of national plans under SAFE, the EU has made operational its subsidized loan mechanism designed to support military investment without immediate pressure on national budgets. Italy’s allocation amounts to about €14.9 billion within a group of eight countries cleared to activate the funds.
Who’s in: The authorization covers Italy, Estonia, Greece, Latvia, Lithuania, Poland, Slovakia and Finland — the second wave of approvals after an initial group admitted in recent weeks. In total, SAFE can mobilize up to €150 billion in loans to strengthen Europe’s defense industrial and technological base and sustain investment amid rising demand.
How the Italian loan works: Italy’s package is structured as a five-year fixed-rate loan at 3%, with repayments starting in 2035 and extending up to 45 years.
- The design allows Rome to finance spending planned for 2026–2030 and cover ongoing contracts, reducing short-term budget impact while stabilizing long-term procurement planning.
Where the money goes: Funds will focus primarily on air and missile defense, as well as counter-UAS systems against drones.
- Eligible spending also includes missiles, artillery ammunition, drones, and capabilities in the space and cyber domains — areas seen as critical gaps requiring accelerated procurement and modernization.
Industrial rules: The instrument prioritizes European production but allows up to 35% of procurement from non-EU suppliers, preserving links with key external partners while reinforcing the continent’s industrial base.
Why it matters: By pushing repayments far into the future and spreading them over decades, SAFE enables Italy to fast-track urgent acquisitions without destabilizing public finances.
- The mechanism doubles as industrial policy, providing continuity for defense supply chains and long-term programs within a European framework aimed at making security spending more coordinated and predictable.
