The European Commission has opened a second round of its SAFE defence loan scheme, offering €21.3 billion that member states left unclaimed in the first round. The new call was announced on 29 October and is open to all 27 member states, with the Commission urging governments to use the money for joint arms purchases with Ukraine.

SAFE, or Security Action for Europe, is the EU's €150 billion loan instrument for defence procurement, adopted in May 2025 as part of the bloc's Readiness 2030 programme. In the first round, 19 member states asked to borrow more than €130 billion between them, and all 19 national plans have been approved. Poland was the largest applicant, seeking €43.7 billion.

What the second round offers

The €21.3 billion on offer is money left over because some governments asked for less than their original allocations. Italy cut its request from €14.9 billion to about €8 billion, and Hungary also revised its plan downwards. The second round is open to every member state, including Germany, one of eight countries that took no loans at all in the first round.

Loans under SAFE can run for up to 45 years with a ten-year grace period, and up to 15 per cent of a loan can be paid upfront. The Commission says it will tell applicants their provisional allocations within two weeks of the submission deadline.

Ukraine joint purchases encouraged

The biggest change in the second round is what Brussels is asking governments to buy. Defence Commissioner Andrius Kubilius has written to capitals asking them to include joint procurement with Ukraine in their plans, with air and missile defence, drones and counter-drone systems, ammunition and missiles named as the most urgent needs.

The push reflects the strain on Ukraine's defences and the EU's aim to build weapons together rather than in 27 separate national programmes. The Commission has stressed, however, that the call only encourages cooperation with Ukraine and does not make it a condition of borrowing.

What happens next

Reports say member states have until 13 November to indicate how much they want to borrow. Once applications close, the Commission will set out how the money is shared. Until then, the €21.3 billion is available credit, not new military capability, and the test will be whether governments use it for joint projects or simply top up national orders.

Sources: Nordic Defence Sector and Poland Journal.