Bulgaria seeks up to €3 billion loan under the SAFE defense instrument

Bulgaria will apply for a loan of up to €3 billion to strengthen its defense industry. The funds can be obtained under the Security Measures for Europe (SAFE) instrument, which the EU will use for urgent and large-scale public investments in support of the European defense industry.

The Council of Ministers adopted the decision at its meeting on Wednesday, authorizing the Minister of Defense to sign and submit an expression of interest to the European Commission by July 29, but it is not legally binding.

With the money (at least €2.7 billion), the government wants to financially secure the implementation of priority military capabilities necessary to guarantee national and allied security.

The announcement does not specify the specific projects in which the funds will be invested.

The Council of Ministers specifies that a significant advantage of the instrument is the exemption from VAT on supplies related to the implementation of projects financed by borrowed funds. SAFE will enable a gradual increase in national defense spending in line with the decision taken by NATO heads of state and government at their meeting in The Hague on June 24-25, within the fiscal rules and constraints of the Public Finance Act.

We would like to remind you that back in March, the European Commission proposed that the European Union take out a new joint loan of €150 billion. The idea is that the money from the joint debt will be used to grant loans to the governments of the bloc's member states to enhance their defense capabilities. It will be used to finance various military areas, such as air and missile defense, artillery systems, missiles and ammunition, drones and anti-drone systems, or to meet other needs ranging from cyber to military mobility.

This step is part of a €800 billion funding effort to help the European Union start rearming itself in the face of Washington's policy shift.

Translated with DeepL.