The European Commission approved Belgium’s defence investment plan on Thursday. This opens the way to a possible 8 billion euro in EU loans.
Belgium is one of 19 EU member states that signed up last year to SAFE, a new 150 billion euro European financing programme designed to support joint investments in the European defence industry.
The aim is to promote collective military procurement and address gaps in key military capability, including in drones, missiles and air defence.
In order to be considered for an EU loan, participating member states were required to submit a national investment plan. This week the European Commission has approved the first eight plans this week. In addition to Belgium, Bulgaria, Spain, Denmark, Croatia, Cyprus, Portugal and Romania have also been given the green light. Together, the eight countries are eligible for around 38 billion euros in loans. Of this 8.34 billion euro could go to Belgium.
The Council of the EU now has four weeks to ratify the Commission’s decision. Once this has been done, the European Commission intends to finalise the individual loan agreements as quickly as possible. The aim is to make the first payments by March.
Exempt from budget balance calculations
In addition to the safe SAFE scheme, the Commission has also offered member states the option of temporarily excluding defence spending from the calculation of their budget balance.
This is how last year Belgium was able to increase defence spending, while still complying with the EU's requirement to reducing the country’s budget deficit. By excluding defence spending from the calculation the European Commission hopes to unlock a further 650 billion euro of investment in defence.