Commission opens a second SAFE round for the remaining €21.3bn, prioritising drones and counter-drone systems and encouraging joint procurement with Ukraine

The remaining €21.3bn and four priority areas

The unspent funds arose because Italy, Hungary and France borrowed less than initially expected. For the second round the Commission is again opening the door to every member state, including Germany and the Netherlands, which stayed out of the first round, and says it will communicate tentative allocations within two weeks of submission. One European outlet reports a deadline of 13 November; the wire agencies give no date, so the deadline rests on a single source.

Single-country procurement, permitted in the first round, closed in May, so second-round loans are limited to cross-border joint procurement. With drones and counter-drone systems written in as priorities alongside air defence and ammunition, the eastern-flank surveillance and drone-defence concepts the Commission has promoted since September now enter the stage of being built into the allocation criteria of a lending instrument.

The channel for joint procurement with Ukraine and its limits

Commissioner Kubilius wrote to governments urging them to include joint projects with Ukrainian companies in their national plans, and President von der Leyen had said in her September State of the Union address that the remaining SAFE funds would go to a programme of joint projects with Ukrainian firms. The second round is therefore the first institutional channel connecting Ukraine's drone industry to Europe's procurement system.

At the same time, SAFE loans cannot legally be passed directly to Ukraine, so the instrument does not close the roughly €70 billion gap in Kyiv's budget. An EU official said 'there is no guarantee' that Ukrainian companies will be included, so the substance will be decided by how far each member state writes Ukrainian firms into its plan.

Where the first round stands

In the first round all 19 national plans were approved, 16 loan agreements have been signed and about €13.5 billion in pre-financing has been disbursed to 11 states. Poland is the largest borrower at €43.73 billion, 89% of it earmarked for domestic procurement. Hungary, under Prime Minister Péter Magyar, cut its request from €16.4 billion to €5.4 billion and won approval on 28 October, with Council approval and a loan agreement still to come. Ireland has signalled interest in the second round.