EU Approves SAFE Fund to Boost Defence Industry, with Ukraine as Official Partner

European Union member states have formally approved the creation of the SAFE financial instrument, a new mechanism aimed at injecting up to €150 billion into the development of the EU’s defence industry, The Gaze reports.

The move marks a major step toward enhancing European security amid ongoing Russian aggression against Ukraine.

The announcement was made on Tuesday by the Polish Presidency of the Council of the EU via X. “Agreement on #SAFE. The more we invest in equipping our armies, the better we will deter those who wish us harm,” the statement read.

Initially proposed by the European Commission in March 2025, the SAFE (Strategic Armament Financing in Europe) instrument envisions joint borrowing and lending to EU member states and partners — including Ukraine — for the purpose of strengthening defence capacities and developing Europe’s defence industrial base.

Antonio Costa, President of the European Council, welcomed the development: “The agreement on the #SAFE loan instrument is an important step toward a stronger Europe. It delivers on the commitments made by EU leaders in March, helping member states invest jointly in European defence and strengthening our shared security.”

Ukrainian Prime Minister Denys Shmyhal hailed the inclusion of Ukraine in the initiative. “EU countries have agreed on the creation of the SAFE mechanism, which provides up to €150 billion for the development of the EU’s defence industry,” he wrote. 

“Ukraine is officially recognised as a partner country, increasing our chances of participating in EU joint defence procurement and supply chains.”

“This is a critically important and urgent decision for strengthening the security of EU countries, Ukraine, and the entire continent. Together, we are stronger,” Shmyhal added.

In April, the European Commission also confirmed a €910 million investment under the European Defence Fund (EDF), which, for the first time, will be open to Ukrainian defence companies. That move was widely seen as a precursor to greater integration of Ukraine into EU defence initiatives.

The SAFE fund will be a cornerstone of the EU’s long-term strategy to reduce dependence on non-European defence suppliers, scale up joint procurement of military capabilities, and better coordinate efforts in the face of mounting global threats.

Read more on The Gaze: Why Russia May Advance Further Into Europe If Not Stopped