Description: European ministers have largely endorsed and introduced the new SAFE (Security Action for Europe) defense loan package estimated at around $170 billion. The initiative was introduced as part of consistent US threats by President Donald Trump to pull American military forces out of Europe if the bloc didn’t raise its defense spending significantly. The European Commission used a fast – track procedure to pass the vote for SAFE and circumvent the European Parliament requiring the votes by the qualified majority of EU’s 27 member countries. Companies and countries eligible to participate in the SAFE initiative must originate from Europe or Ukraine or have a defense strategic partnership with the Union like the one with the UK. Russian foreign officials have criticized the EU’s new defensive spending plan, citing concerns that Europe started to represent a militarized bloc of countries and inflates the threat from Russia to justify the increase in military spending.
Impact: Approving the SAFE initiative, Europe takes a considerable step towards its defensive independence which is undoubtedly incentivized by the continuous threats from the US and Russia. European ministers with the SAFE initiative offer the US reassurances of increased military spending and secure the involvement from the Trump administration in the joint defense of the continent. The approval of SAFE would most certainly raise the stock prices in the defense industry across the continent as one of the mandatory conditions for participation is European origin of production. The move is already perceived by Russia as stimulating further rearmament which could potentially elevate the global arms race and pose a threat to the diplomatic and political optics of the outcome from the war in Ukraine. The approval of the initiative also conforms Europe back to its original traditional partnership with the US and aims to appease the Trump administration in continued joint geostrategic support on global issues. The initiative could also impact the ongoing trade negotiations between Europe and the US, as the bloc of countries might use the package to boost its credibility and gain favorable trade conditions from the US.