Portugal, alongside nine other European Union (EU) countries, has expressed interest to the European Commission in participating in a 150 billion euro European loan program designed to bolster defense under favorable conditions.
This information was disclosed by European sources, indicating that Portugal, along with Poland, France, Lithuania, Estonia, Romania, Bulgaria, Slovakia, Greece, and Latvia, has shown “strong interest” in these loans.
These sources emphasized that no formal requests have been made yet, as the deadline is set for the end of July, and allocation envelopes have not yet been established.
In an interview published over the weekend, Finance Minister Joaquim Miranda Sarmento suggested that the Government might participate in the program and advocated for joint EU acquisitions, specifically mentioning the sale of a military aircraft produced in Portugal.
“It’s possible that we will resort to SAFE, although SAFE’s current financing conditions are not significantly more favorable than those of the Portuguese Republic, but we are evaluating all available alternatives,” stated Joaquim Miranda Sarmento.
Just days before the North Atlantic Treaty Organization (NATO) summit, characterized by heightened geopolitical tensions in the Middle East and Ukraine and a pressing need to increase security investment, the minister also noted that “a military aircraft is being produced in Portugal, and the [Ministry of] Defense is currently developing agreements with other countries for its purchase.”
The aim is not only for Portugal to benefit from these EU community loans (known as SAFE) but also to participate in European projects, potentially selling domestically produced equipment.
“What the Ministry of Defense is doing is establishing protocols with other countries so that these countries can acquire this aircraft, which is predominantly made in Portugal,” said Joaquim Miranda Sarmento in the interview.
The Finance Minister referred to the KC-390, a twin-engine aircraft whose components are manufactured in Évora and by the Brazilian company Embraer.
The KC-390 is a versatile military transport aircraft designed for tactical and logistical use, with intercontinental reach suitable for military operations, including those of NATO.
At the end of May, the EU Council adopted this package of 150 billion euros in loans for joint purchases to reinforce communal defense, which countries can request from Brussels until the end of the year.
This loan package, known as SAFE, is intended to facilitate joint military equipment purchases among member states, funded through EU-issued joint debt and subsequently transferred as credits to requesting member states.
This new European credit instrument is part of the 800 billion euro plan for EU defense.
This European plan also includes 650 billion euros in budgetary space that countries can have to invest in defense, following the activation of the national safeguard clause of EU budget rules, allowing for up to 1.5% of GDP in military spending to be excluded from deficit limits. Lisbon has already received approval from Brussels for such action.
The 32 NATO allies will meet on Tuesday and Wednesday at a summit in the Dutch city of The Hague, under the pressure of increased defense spending urgency.
