EU Approves €5.8Bn Defence Funding for Portugal (SAFE)

The European Commission has given the green light to the national defence plans of eight Member States, a decisive step for Europe’s strategic autonomy. Portugal is among the beneficiaries, with a tentative allocation exceeding €5.8 billion.

On January 15, the Commission submitted a proposal to the Council to approve financial assistance for Belgium, Bulgaria, Denmark, Spain, Croatia, Cyprus, Portugal, and Romania. This measure falls under the Security Action for Europe (SAFE initiative), designed to support industrial and military readiness.

Ursula von der Leyen, President of the Commission, highlighted the historic progress: “Last year, the EU achieved more progress in the field of defence than in previous decades… It is now urgent that the Council approves these plans so that funding can be disbursed quickly.”

Industrial Impact of the SAFE Instrument

SAFE is not just a procurement mechanism; it is an industrial development engine. With a total EU loan budget of up to €150 billion, the program aims to close critical capability gaps in two main categories:

Category 1: Ammunition, missiles, artillery systems, ground combat capabilities, drones (NATO class 1), and cyber defence.
Category 2: Air and missile defence, naval capabilities, space assets, and artificial intelligence.

European Origin Rule

To strengthen the European industrial base, procurement contracts require that no more than 35% of component costs originate from outside the EU (or associated countries like Ukraine and EFTA). This rule creates direct opportunities for the Portuguese manufacturing industry.

Portugal: Allocation and Strategy

According to preliminary data, the tentative allocation for Portugal is €5,841,179,332. This funding, in the form of low-cost long-term loans (thanks to the EU’s “AAA” rating), will enable the joint procurement of modern equipment and support the national industry in integrating these value chains.