Key Developments within the SAFE Regulation Implementation Progress and Challenges

Since getting into into drive in late May 2025, the EU’s Security Action for Europe (SAFE) Regulation, a €150 billion defence mortgage program, has quickly transitioned from a legislative proposal to operational framework, marked by a number of important developments.

1. Financial Allocation Framework

The European Commission has established a provisional allocation framework for the €150 billion mortgage facility, responding to substantial demand from 19 Member States whose collective requests exceeded the accessible funds.

Member State	Tentative Allocation Amount (€)
Poland	43,734,100,805
Romania	16,680,055,394
France	16,216,720,524
Hungary	16,216,720,524
Italy	14,900,000,000
Lithuania	6,375,487,840
Latvia	5,680,431,322
Portugal	5,841,179,332
Belgium	8,340,027,698
Bulgaria	3,261,700,000
Estonia	2,660,932,171
Slovakia	2,316,674,361
Czechia	2,060,000,000
Croatia	1,700,000,000
Cyprus	1,181,503,924
Finland	1,000,000,000
Spain	1,000,000,000
Greece	787,669,283
Denmark	46,796,822
Total	150,000,000,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Poland leads the allocation with over €43.7 billion, adopted by Romania, France, and Hungary. Member States should now submit their complete National Defence Investment Plans by November 30, 2025.

Following endorsement by the College of Commissioners, Member States should submit formal mortgage requests by November 30, 2025, accompanied by detailed funding plans specifying meant defence procurements and demonstrating compliance with SAFE eligibility standards. Upon validation of the European Commission, a Council implementation choice shall be proposed and should be adopted inside 4 weeks.

Subsequently, the European Commission will negotiate particular person mortgage agreements and operational preparations with every Member State, establishing mortgage phrases, disbursement schedules, and implementation frameworks. Pre-financing of as much as 15% of the mortgage quantity could also be supplied upon settlement signature, if requested.

The SAFE Regulation helps procurement of precedence defence merchandise organized into two distinct classes:

Category 1

• Ammunition and missiles
• Artillery techniques, together with deep precision strike capabilities
• Ground fight capabilities and their help techniques, together with soldier gear and infantry weapons
• Small drones (NATO class 1) and associated anti-drone techniques
• Critical infrastructure safety
• Cyber
• Military mobility together with counter-mobility

Category 2

• Air and missile defence techniques
• Maritime floor and underwater capabilities
• Drones aside from small drones (NATO class 2 and three) and associated anti-drone techniques
• Strategic enablers akin to, however not restricted to, strategic airlift, air-to-air refuelling, C4ISTAR techniques in addition to house belongings and companies
• Space belongings safety
• Artificial intelligence and digital warfare

2. Institutional Challenge: European Parliament Legal Action

In August 2025, the European Parliament initiated proceedings towards the Council on the Court of Justice of the European Union (CJEU), in search of annulment of the SAFE Regulation. This authorized problem doesn’t oppose this system’s aims, which Parliament totally helps, however reasonably contests the procedural foundation for its adoption. Parliament contends that the Commission’s invocation of Article 122 TFEU’s emergency clause to expedite the regulation was procedurally inappropriate and undermined democratic legitimacy by bypassing parliamentary involvement. The motion requests that the CJEU keep the regulation’s operational standing pending adoption of a alternative measure, guaranteeing continuity of funding flows.

3. Third-Country Participation and Political Complexities

The SAFE framework permits participation by non-EU nations, with each Turkey and South Korea having submitted formal participation requests to the European Commission. However, Turkey’s software faces important political obstacles, as Greek officers have indicated their intention to oppose its inclusion. Prime Minister Kyriakos Mitsotakis has said that Greece won’t help Turkey’s participation whereas the “casus belli” declaration stays in impact. Third-country participation requires unanimous approval from all EU Member States.

These developments underscore each the speedy operationalization of the SAFE program and the complicated political and institutional challenges accompanying its implementation. The forthcoming months will show essential as Member States finalize their funding plans and the CJEU considers the parliamentary problem.

4. Strategic Business Positioning Amid Regulatory Uncertainties

Notwithstanding ongoing authorized proceedings and geopolitical tensions, companies ought to undertake proactive methods to capitalize on rising SAFE procurement alternatives. The regulation stays totally operational, with Member States advancing their National Defence Investment Plans in response to established timelines, guaranteeing procurement actions will proceed as scheduled.

Companies ought to set up systematic monitoring of contract notices throughout EU Member State procurement platforms and develop strong inner capabilities for speedy tender response. This encompasses technical competency growth, strategic partnership formation, and complete EU procurement compliance frameworks. Internal preparation ought to prioritize understanding particular necessities for Category 1 and Category 2 defence merchandise as outlined within the regulation.

Non-EU corporations should fastidiously analyze the fitting of entry provisions inside the SAFE Regulation. While third-country participation is permitted, the unanimous Member State approval requirement introduces important procedural complexity. Non-EU entities ought to conduct thorough eligibility assessments, consider EU partnership or subsidiary institution choices, and monitor carefully the outcomes of present participation requests from Turkey and South Korea, which can set up essential precedents for future third-country purposes.