Ecofin moves forward with 150 bln defense loan mechanism

Brussels – The work does not stop; on the contrary, it is moving forward with the aim of closing it by the end of the month. Member states are moving forward on defense and financing companies in the sector, and the May 13 Ecofin Council intends to make a significant breakthrough in that direction. According to sources close to the dossier, the Polish Council’s rotating presidency wants to prevent the issue from returning to the leaders’ hands at the June summit. The special 150 billion loan facility (known as ‘SAFE,’ Security Action for Europe) at the center of the European Commission’s strategy is not only not touched but even intended to be endorsed.

“Discussions are always difficult when there are defense proposals, but there is a determination to move forward quickly,” the same European sources note. There is no shortage of hurdles to overcome, including the burden on national budgets, and the debate among the Economy Ministers will focus precisely on the relationship between loans and debt. Everyone agrees on the general framework for the rest of the special 150-billion-euro instrument.

The conditionality linking granting loans to respect the rule of law by member states and the eligibility criteria for funds that do not penalize economic operators remains firm. Whatever the size of enterprises — small or large — there is flexibility to ensure the effectiveness of the European strategy.

What seems clear is that member states have no intention of calling into question the emergency procedure prescribed by the Treaties and invoked by the European Commission to approve the SAFE regulation. “No objections” to the legal basis in the Council, sources trust. Therefore, the fast-track procedure that effectively bypasses the European Parliament in the decision-making process will not be changed.

After all, changing the procedure would mean that the EU Commission would have to rewrite the texts and that the Polish presidency of the EU Council would have to say goodbye to the goal of approval by the end of May. So, full steam ahead. The only unknown, if anything, is the participation of non-EU partners such as the United Kingdom in the EU program. However, it is possible to overcome this issue, and it is unlikely to prevent an agreement among the Twenty-seven.