With SAFE Fully Subscribed, Where does EU Defence Go Now?

Hi! Today is September 8th, and here is your EU news summary for the week. Feel free to share this newsletter with friends and colleagues, and follow us on Twitter and LinkedIn.

Juraj Majcin is a Policy Analyst at the European Policy Centre (EPC) in Brussels, focusing on European and transatlantic security and defence, the defence industry and innovation. His analysis has been featured in international outlets including Euractiv, Newsweek, Reuters, CNN, and Sky News. He is from Slovakia.

Europe is entering a decisive phase in its quest to strengthen the continent’s defences. With Russia’s war still raging, doubts over America’s reliability growing and NATO demanding higher spending, the Europêan Commission is trying to carve out a bigger role.

Ursula von der Leyen’s tour of the EU’s eastern flank and the full subscription of the new 150 billion euro SAFE (“Security Action for Europe”, launched in May 2025) instrument have given momentum. But questions remain over whether the Commission can move beyond financing and whether Member States are ready to accept a stronger EU hand in security and defence.

What are capability gaps and why do we need to close them?

Europe faces pressure on two fronts. Russia’s war against Ukraine has pushed governments to raise defence spending, buy new weapons and recruit more troops, while doubts over US commitment under Donald Trump and Washington’s tilt to the Indo Pacific have fuelled calls for greater autonomy.

Yet Europe remains acutely vulnerable, still lacking key capacities in sufficient quality or quantity, such as air-to-air refuelling, satellite intelligence and surveillance, air and missile defence, precision munitions and long-range missiles, as well as independent command and control structures.

Why SAFE matters for EU defence, and where it falls short?

The 150-billion-euro SAFE instrument pursues three main goals:

• Encourage EU Member States to close gaps in critical military capabilities.
• Pool purchases among two or more states to achieve economies of scale and reduce costs.
• Prioritise procurement of equipment produced within the EU, the EEA or partner countries, while loans remain available only to EU members.

The SAFE instrument is quite revolutionary as it is the EU’s first quasi-joint borrowing for weapons. But with 150 billion euros, it is far below NATO’s new 5 percent pledge, which calls for 3.5 percent of GDP on military equipment and 1.5 percent on broader security. The European Defence Agency estimates that raising EU spending from 2 to 3.5 percent by 2035 would alone require extra 300 billion euros a year.

Reaching this target will be difficult, as low growth and limited fiscal space leave governments little room to raise taxes or borrow, forcing them to consider politically painful cuts to public spending as the only option.

Why was von der Leyen’s tour of the frontline states important?

Touring the frontline states, von der Leyen stressed that strengthening Europe’s defences goes beyond increasing defence spending. It also means:

• Improving military mobility to move troops and evacuate civilians,
• Reinforcing border security against hybrid threats such as weaponised migration
• Constructing physical defensive barriers like Poland’s EU-backed East Shield or Baltic Defence line.

To support these aims, Ursula von der Leyen pledged to triple EU funding for border protection and increase investment in military mobility tenfold in the next budget.

The limits of Brussels’ defence ambitions

The SAFE instrument and von der Leyen’s recent tour signal the Commission’s ambition to play a bigger role in Europe’s defence. Yet it is far from clear whether Brussels can move beyond financing national efforts, even with security and defence now at the top of its agenda. Several obstacles stand in the way:

• Legal and political limits: EU treaties curb deeper action in defence. Many states favour their “national champions” in defence procurement, blocking a true European defence market, one of the Commission’s goals.
• Financing disputes: Joint borrowing for Brussels-led defence initiatives remains divisive. For example, Germany has applied for SAFE loans but rejects new schemes in favour of national funding and procurement.
• Brussels overreach: Plans for regular reviews by the Commission of Member States’ defence spending and supply-chain reporting by defence companies are seen by some as undue Brussels interference in national defence.
• Transatlantic dilemma: The Commission’s push to “buy European” collides with the recent EU-US pledge to expand procurement of US weaponry. Also, some governments view “buying American” as a way to keep good relations with the Trump administration.

What’s next?

The coming months will show how the SAFE instrument translates into concrete procurement of military equipment by Member States.

The European Commission is also set to present a roadmap on closing European capability gaps to the European Council in the coming months, a debate closely tied to negotiations over the next EU budget.

The European Parliament has taken the SAFE regulation to the EU Court of Justice, arguing that by using Article 122 TFEU, normally reserved for emergencies, the Commission and Council sidestepped Parliament’s role in the legislative process. The outcome of this legal challenge will be key.

MERCOSUR • On 3 September 2025, the Commission presented its proposals to the Council for the signing and conclusion of the free trade agreement between the EU and Mercosur (Brazil, Argentina, Uruguay, Paraguay).

After the political agreement of 6 December 2024, France’s Emmanuel Macron judged the text “unacceptable,” pointing to risks for agriculture and the environment. France had since tried to build a blocking minority with Poland and other Member States, but was unable to block the agreement.

The treaty must still be approved by the Council and the European Parliament. Then 43 national or regional ratifications will be required. Entry into force is not expected before the end of 2026.

BUDGET • On 3 September 2025, the Commission adopted a second package of seven sectoral proposals to complete the 2028–2034 multiannual budget (MFF).

They concern the single market and customs, the “Justice” programme, Euratom (research and training), nuclear safety and decommissioning, the assistance programme for dismantling the Ignalina plant in Lithuania, the overseas association decision, and the Pericles V programme.

This package makes the budget text ready for negotiations with Parliament and Council. But the financial framework is politically sensitive: it is accompanied by a deep reform of the Common Agricultural Policy (CAP), already proposed in mid-July with the rest of the budget.

These subsidies will now be integrated into national and regional plans, with a planned reduction in direct income support to farmers compared with 2021–2027.

GOOGLE • The European Commission fined Google €2.95 billion for abuse of dominance in the advertising technology (AdTech) sector.

Following an investigation launched in 2021, the Commission concluded that Google systematically favoured its own ad exchange services (AdX) to the detriment of rivals, by self-preferencing on its DoubleClick platform and granting privileged access to data and auctions to its own tools.

This penalty, the fourth imposed on Google by the EU in ten years, comes amid heightened trade tensions between the EU and the United States, with President Trump threatening retaliatory measures against Europe in response.

On 1 September, MLex revealed that the decision against Google had been suspended at the last minute under pressure from the US administration and Trade Commissioner Maroš Šefčovič. The decision was announced a few days later, on 5 September. Google has been ordered to end its self-preferencing practices within 60 days and to propose solutions to eliminate the identified conflicts of interest in the AdTech value chain, or face stricter corrective measures in the future.

• In the Financial Times, Martin Sandbu notes that the perpetual search for absolute consensus slows decision-making and hampers the ability to act effectively. He calls on the EU to take the bull (the Member States) by the horns in order to move forward.
• The Wall Street Journal looks into the transatlantic trade situation and describes it as a very fragile “trade truce.”