Estonia secures €2.34bn EU loan for defence investment
Estonia has signed a financing agreement with the European Commission for a long-term loan of up to €2.34 billion under the SAFE programme, aiming to boost defence spending above 5% of GDP while easing budget pressure.
Estonia's Ministry of Finance announced on Wednesday that the country has reached a financing agreement with the European Commission under the Security Action for Europe (SAFE) programme. The deal provides Estonia with a long-term loan of up to €2.34 billion for defence investment. According to the ministry, the credit will accelerate measures planned by the Ministry of Defence to enhance the country's defence capabilities.
Estonia has decided to maintain defence expenditure above 5% of its gross domestic product in the coming years. The new borrowing is expected to ease the strain on the state budget caused by sharply higher defence spending. The finance ministry noted that taking a loan through SAFE is more cost-effective than borrowing on its own, because the European Union can issue debt at more favourable rates given its status as a major borrower.
The EU plans to raise up to €150 billion on financial markets under SAFE and distribute the funds among member states. The loan has a maturity of 45 years.
Kadri Peters, deputy secretary general of the Ministry of Defence, said the rapidly changing security environment in Europe requires the entire alliance to reinforce its defence and act faster. Large-scale purchases are planned in the coming years, and they will have a direct impact on the security of Estonia and the wider region. The Ministry of Defence intends to use the SAFE credit to strengthen air defence, acquire military vehicles, artillery shells and other ammunition, as well as provide unmanned aerial vehicles to Ukraine.
Estonia submitted its final application for the SAFE loan to the European Commission in November 2025. All purchases and deliveries financed through the loan must be completed by 2030.
