Latvia Signs €3.5 Billion Loan Agreement to Strengthen Defense

On Saturday, June 20, Latvia officially signed the SAFE (Security Action for Europe) loan agreement, worth €3,497,870,000, to strengthen its defense and security capabilities. The document was signed by Prime Minister Andris Kulbergs (AS), European Commissioner for Defence and Space Andrius Kubilius, Defense Minister Raivis Melnis, and Finance Minister Māris Kučinskis (AS) in a ceremony.

The first tranche of €524,680,500 is expected to be received within a few weeks. Prime Minister Kulbergs emphasized that this is an important day for Latvia and Europe, stressing that the funds must serve not only to purchase military equipment but also to develop Latvia's defense industry and economy. He noted that the loan must be repaid, so it should contribute to the country's economic interests.

Commissioner Kubilius thanked Latvia for prioritizing defense and highlighted Latvia's progress in drone technology, which is crucial for European security. He also mentioned the Eastern Flank surveillance project, covering the area from the Baltic to the Black Sea, to be discussed next week at a summit in Gdańsk, Poland.

Defense Minister Melnis said the agreement is an investment in Latvia's and Europe's security, and the funds will be used to strengthen the National Armed Forces, border guard, and civil defense. Finance Minister Kučinskis added that the loan is already accounted for in the defense budget and provides additional opportunities.

SAFE is an EU financial instrument allowing member states to borrow funds to address critical defense capability gaps and boost the defense industry. Unlike grants, SAFE is a loan that must be repaid. All deliveries under this instrument are to be completed by the end of 2030.