Estonian parliament panel endorses loan instrument to promote defense industry in Europe

TALLINN - The Riigikogu EU affairs committee has set forth and approved Estonia's positions on the European Union initiative to establish the Security Action for Europe (SAFE) to promote Europe's defense industry.

The chairman of the committee, Peeter Tali, said in a press release that Russia's war of aggression in Ukraine has also undermined the security situation in Europe, which is why the EU is keen to strengthen its defense capability and industry.

"For this purpose, the plan is to take out a loan of 150 billion euros and create the SAFE loan instrument, which would allow the member states to take out joint loans for urgent and large investments into their defense capabilities," he said.

The joint procurements in national defense must be carried out jointly by at least two countries, and the other country could also be Ukraine or a NATO ally.

"Estonia's focus lies in a speedy increase in Europe's defense capability, but also in supporting Ukraine, and promoting cross-border cooperation. We absolutely encourage Estonia’s defense industry to take part in the procurements," the MP stressed, adding that it is also important to reduce bureaucracy in defense procurements.

The positions say that Estonia supports the main goals of the initiative: implementing the EU budget for supporting national defense investments, increasing the production capacity of the European defense industry, and helping Ukraine. Estonia also supports promoting cross-border cooperation and including SMEs with the application of the instrument.

The SAFE loan instrument is one of the five pillars in the White Paper for European Defense Readiness, presented by the president of the European Commission, Ursula van der Leyen, in March. The ministers of finance will discuss the proposal in May and its implementation could start as soon as in autumn or winter this year.

The positions of the government on the proposal for establishing the SAFE to promote our defense industry were introduced at the sitting of the EU affairs committee by Defense Minister Hanno Pevkur, as well as the head of the EU and international relations department, Martin Põder, and the head of the tax and customs policy department, Erle Kõomets, from the Finance Ministry.

The EU affairs committee decided to approve the positions of the government, taking also into account the opinion of the national defense committee.