Bulgaria has joined eight other European nations in formally applying for low-interest loans from the European Union to jointly purchase weapons. These arms will serve dual purposes: supporting Ukraine and upgrading the military capabilities of the participating countries themselves.

The deadline for submitting applications to the EU’s new financing tool, SAFE (Security Action for Europe), ended yesterday. SAFE offers up to €150 billion in preferential loans, allowing participating states to finance up to 15% of their project costs upfront, with repayments spread over as long as 45 years.

For its part, Bulgaria has requested a loan ranging from €2.7 to €3 billion to fund priority defense projects aimed at strengthening its national military. This request was approved by the Council of Ministers on July 23.

Other countries expressing interest include Belgium, Cyprus, the Czech Republic, Estonia, Spain, Finland, Hungary, and Lithuania. France is also expected to participate despite its current budget limitations.

A major advantage of SAFE lies in its collective purchasing power, enabling member states to negotiate more favorable prices for military equipment. The program stipulates that at least 65% of each purchased product’s components must be sourced within Europe, with direct procurement from Ukrainian firms actively encouraged. Additionally, purchases under SAFE are exempt from VAT, further lowering costs.

Countries are approaching this mechanism differently: Bulgaria and the other eight nations opted for loans, while wealthier states such as Germany, Sweden, and the Netherlands are participating without borrowing. Meanwhile, countries with higher debt burdens like Austria and Italy have chosen not to take part, citing concerns over increasing their liabilities.

SAFE forms part of the EU’s broader ReArm Europe initiative, designed to develop Europe’s defense industry and reduce reliance on American arms supplies. This strategy gains significance amid uncertain future military support signals from the U.S. administration under President Donald Trump.

The SAFE mechanism functions as a collective deferred payment system, where each country can access a loan covering an upfront payment of up to 15%, with repayment terms extending to 45 years. The EU budget guarantees these loans, ensuring member states face no additional financial risk if repayment issues arise.