Security Action for Europe (SAFE): Constitutional Issues of Borrowing to Rearm

This chapter offers a critical analysis of the Security Action for Europe (SAFE), a €150 billion debt-based instrument approved by the European Union (EU) in 2025. It looks at its legal and financial design, as well as governance through plans. SAFE extends the Recovery and Resilience Facility (RRF) technology developed during Covid-19 crises into defence spending. The Chapter argues that SAFE and the broader Readiness 2030 plan mark a historic paradigm shift in EU economic and security governance, by breaking with two long standing taboos: primacy of fiscal discipline under the Stability and Growth Pact (SGP) and resistance to common borrowing to fund defence equipment. As such, defence readiness becomes a vector for fiscal innovation, capable of reshaping the Union finances and their relationship with national budgets. The Chapter also shows how SAFE’s borrowing-for-lending architecture consolidates the EU’s debt capacity and regular capital markets presence, portraying it as an embryonic ‘European debt agency’. A distinctive innovation of SAFE lies in its new forms of industrial conditionality. Access to SAFE-related loans is subject to requirements designed to coordinate joint procurement, boost European defence-related production, and reduce strategic dependencies. Overall, it aims at strengthening the European Defence Industrial Base. Yet SAFE’s approach presents some weaknesses. Fiscal flexibility granted upon activation of national escape clauses under the reformed SGP does not eliminate debt sustainability issues, as SAFE loans entail additional debt assumed by the beneficiary Member States. Their participation, therefore, depends on national fiscal spaces, competing priorities, and parliamentary approval. The Chapter concludes that SAFE advances the EU economic integration, but its reliance on loans limits its capacity to deliver defence readiness by 2030 and might lead to uneven results.