Headlines
EU ministers approve new 150 billion-euro arms fund
Published by Global Banking & Finance Review®
Posted on May 27, 2025
3 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on May 27, 2025
3 min readLast updated: January 23, 2026
EU ministers have approved a 150 billion-euro defense fund to enhance security against potential Russian threats, promoting joint defense projects.
By Andrew Gray
BRUSSELS (Reuters) -The European Union on Tuesday approved the creation of a 150 billion-euro ($170.7 billion) EU arms fund, driven by fears of a Russian attack in the coming years and doubts about U.S. security commitments to the continent.
The approval, by ministers from EU countries meeting in Brussels, was the final legal step in setting up the Security Action for Europe (SAFE) scheme, using joint EU borrowing to give loans to European countries for joint defence projects.
The measure was backed by 26 of the EU's 27 member countries, with Hungary abstaining, diplomats said.
"We adopted SAFE – first large-scale defence investment programme on the EU level," Poland, which holds the EU's rotating presidency, said on X.
"The more we invest in our security, the better we deter those who wish us harm."
The European Commission, the EU's executive body, proposed the fund in March as fears grew among European leaders that they could not be sure that U.S. President Donald Trump's administration would defend them from attack.
Alarmed by Russia's 2022 invasion of Ukraine and fearing they could be Moscow's next target, EU countries have already increased defence spending by more than 30% in the past three years. But EU leaders say that is not enough.
Moscow has condemned the EU's rearmament push as an incitement to war based on an "invented story" of a Russian threat. Such words have not reassured European leaders, as Russia made similar statements before the full-scale invasion of Ukraine.
The EU initiative seeks to break down national barriers by financing joint projects between EU countries and includes a strong "buy European" element as it aims to boost the continent's defence industry.
For a project to qualify for SAFE funding, 65% of its value must come from companies based in the EU, the broader European Economic Area, or Ukraine.
However, companies from countries that have signed a Security and Defence Partnership with the EU can also be eligible, if they meet further conditions.
Britain signed such an agreement with the EU earlier this month, bringing British companies such as BAE Systems a step closer to participation in SAFE projects.
The Commission used a fast-track procedure to launch the legislation, bypassing the European Parliament and only requiring the approval of EU governments.
(Reporting by Andrew Grey, Editing by Charlotte Van Campenhout; Editing by Sharon Singleton)
The EU's new arms fund aims to enhance security and defense capabilities among member states, driven by fears of potential Russian aggression.
The European Union has approved the creation of a 150 billion-euro arms fund, equivalent to approximately 170.7 billion dollars.
The arms fund initiative was backed by 26 of the EU's 27 member countries, with Hungary being the only country to abstain from the vote.
For a project to qualify for SAFE funding, at least 65% of its value must come from companies based in the EU, the European Economic Area, or Ukraine.
Russia has condemned the EU's rearmament efforts, labeling them as an incitement to war based on an 'invented story' of a Russian threat.
Explore more articles in the Headlines category
