Ambassadors from 27 EU Member States Finalize Draft of Weapons Loan Fund
The European Union (EU) reached a provisional agreement on May 19 (local time) to establish a joint weapons procurement loan fund of up to 150 billion euros (approximately 236 trillion won).
According to foreign media reports on May 19, ambassadors from the 27 EU member states finalized the draft of the EU weapons loan fund program, known as 'SAFE' (Security Action For Europe), on this day. The program will be officially implemented once it is approved at the ministerial-level meeting scheduled for next week.
The purpose of this fund is to provide loans, backed by the EU budget, to EU member states that pursue joint weapons procurement either to support Ukraine or to replenish their own stockpiles. The European Commission, the EU's executive body, created this fund to support member states seeking to accelerate weapons stockpiling in response to pressure from the Donald Trump administration to increase defense spending, as well as the threat from Russia.
The draft regulations for the fund also allow 'EU candidate countries, countries that have applied for EU membership, and countries that have entered into security and defense partnerships with the EU' to participate in joint procurement. However, it is stipulated that at least 65% of the components, based on the price of the finished product, must be produced either within the European Free Trade Association (EFTA) area or in Ukraine. This means that components produced outside these regions must not exceed 35% of the total.
The agreement was reached on the same day that a bilateral security and defense partnership was concluded at the UK-EU summit held in London, United Kingdom. As a result, among non-EU countries, not only Ukraine and Norway but also the United Kingdom, which has left the EU, will be eligible to benefit from the loan fund.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
