Officially, the EU’s SAFE instrument aims to boost Europe’s defence readiness by financing joint procurement, expanding industrial production and closing capability gaps. The mechanism is straightforward on paper. SAFE provides loans to member states for public investment in defence capabilities and military procurement. The money is raised on capital markets or from financial institutions, then lent onwards. To access the funds, each country must submit a detailed investment plan: what equipment it intends to buy, what actions it will take, how much it will spend, how the financing will be structured, and how it will comply with the regulation.
However, SAFE is a financing model that links defence money to political conditionality. Structurally, it links access to EU funds with adherence to European values – democracy, rule of law and fundamental rights – and compliance with Migration and Asylum Pact, climate policy targets, gender equality strategies and media oversight frameworks. The money does not flow automatically. Funds are released in tranches subject to the Commission approval.
Funds can be suspended if the Commission concludes that breaches of the rule of law pose a serious risk of affecting the EU’s financial interests. The mere existence of a “serious risk” is enough. The criteria are broad and largely discretionary. This means SAFE payments could be suspended on the basis of political assessments regarding a member state’s rule of law. In effect, SAFE becomes another extra-treaty instrument of influence, using debt and budgetary leverage to shape national policy.