Portugal to ask EU for defence loans at favourable terms

Portugal and nine countries in the European Union have shown interest in applying to the European Commission’s €150Bn SAFE programme to beef up defence capacities.

According to Lusa and European sources, Portugal, Poland, France, Lithuania, Estonia, Romania, Bulgaria, Slovakia, Greece, and Lithuania have all shown a manifest interest in obtaining defence spending loans at favorable borrowing rates.

The same sources also emphasise that the application procedure will not be finalised until the end of July and the procedures and terms for allocation amounts have yet to be finalised.

In an interview with Lusa published last week, the Minister of Finances, Joaquim Miranda Sarmento, admitted that the government could apply for the programme and argued for joint acquisitions in the EU, particularly the sale of a military aircraft produced in Portugal.

“Countries can apply to SAFE although at the moment financing conditions are not particularly more favourable than financing terms offered by the Portuguese State”, said Joaquim Miranda Sarmento.

The minister said, “there is a military aircraft produced in Portugal and the Ministry of Defence is currently drawing up agreements with other countries to buy it.”

The idea is not only for Portugal to benefit from community funding, but to also be part of European projects and still sell equipment produced in Portugal.

The Ministry of Defence is establishing protocols with other countries so that they can acquire the aircraft – the KC-390, a dual-engine plane produced in Évora by the Brazilian company Embraer.

SAFE is a new European credit instrument for extraordinary circumstances that is one of the measures in a €800Bn defence plan for the EU.

Also part of this European plan is €650Bn in the budget space for countries so that they can invest in defence after the activation of a national clause that safeguards EU budget rules which exclude 1.5% of GDP spent on the military which Portugal has been given the green light to do by Brussels.