EU Launches $170 Billion Defense Fund Amid Fears of U.S. Withdrawal and Russian Aggression
The European Union has approved a sweeping $170 billion defense fund in a bold move to strengthen the bloc’s military capabilities amid rising concerns over future U.S. support and the threat of renewed conflict with Russia.
On May 27, the European Council announced the creation of the Strategic Autonomy for Europe (SAFE) initiative—described as the first pillar of the EU’s “Rearmament and Readiness 2030” plan. The fund is designed to bolster Europe’s defense industry and improve collective security across the continent.
“This instrument will provide up to $170 billion in financial support to strengthen European security and accelerate the growth of our defense industry,” the European Council stated.
The decision was passed at an EU ministers’ summit in Belgium, where 26 of 27 member states voted in favor. Hungary abstained. The European Commission used a fast-track procedure to bypass the European Parliament, requiring only approval from national governments.
A New Defense Framework for Europe
Under the SAFE mechanism, the EU will raise capital on financial markets and offer low-interest loans to member states for joint weapons development projects. To qualify, at least 65% of a project’s value must originate from companies based in the EU, Ukraine, or the European Economic Area (EEA), which includes Iceland, Liechtenstein, and Norway.
However, firms from countries that have signed a Security and Defense Partnership with the EU—such as the United Kingdom—can also participate, provided they meet additional requirements. The UK signed such an agreement in April, opening the door for its defense contractors to join SAFE-backed programs.
Driving Forces Behind the Plan
The European Commission proposed the SAFE fund in March amid growing fears that the United States—under President Donald Trump—may not come to Europe’s defense in the event of war. EU leaders are also increasingly concerned about the risk of a broader military confrontation with Russia once the war in Ukraine eventually ends.
These concerns have driven European countries to boost defense spending by more than 30% over the past three years. But EU leadership warns that’s not enough.
SAFE is part of a broader strategy that could mobilize up to $900 billion in military-related investments across Europe by 2030. The initiative reflects the bloc’s push toward strategic autonomy, reducing dependency on transatlantic defense guarantees.
Russia Responds
The Kremlin swiftly condemned the EU’s new rearmament drive. A spokesperson called the plan “an escalation based on a fabricated threat” and accused European leaders of fueling regional instability with anti-Russian narratives.
Despite the criticism, Brussels insists the SAFE fund is about preparedness, not provocation.
As geopolitical tensions continue to rise, Europe’s largest defense push in decades signals a historic shift—one that could reshape the continent’s military posture for years to come.
(Sources: Reuters, AFP)
