The Czech government yesterday approved the country’s participation in the EU loan programme for purchasing military equipment, known as Security Action for Europe (SAFE). The Czech Republic is set to draw approximately EUR 2.06 billion (approximately CZK 50 billion).
The government previously discussed the matter in May, but Prime Minister Andrej Babis (ANO) told reporters at the time that he needed further information on individual projects from Defence Minister Jaromir Zuna (SPD). The funds are to be allocated for Leopard 2A8 tanks and Tatra T-815 vehicles. The loan will also finance upgrading the D11 highway for military use.
In March of this year, the European Commission reviewed and approved the Czech plan, and a month later it was approved by the Council of the EU. Nineteen member states have joined the programme, including neighbouring Poland and Slovakia.
Zuna previously said that funds from the SAFE loan do not count toward defence spending requirements under the North Atlantic Treaty Organisation (NATO), as they are borrowed funds.
The previous cabinet led by Petr Fiala (ODS) recommended the use of the loan and selected projects to which the funds should be allocated, but the current cabinet has since decided to reallocate the funds.
“The amount allocated to the D11 highway was significantly increased, while the amount earmarked for Leopard 2A8 tanks was correspondingly reduced, without this jeopardising the project in any way,” stated the Ministry of Defence.
In May, Babis criticised Fiala’s government, arguing that the Czech Republic had borrowed the least amount of money per capita among the participating countries. Poland is set to borrow the most, equivalent to more than CZK 1 trillion. It plans to use part of the funds, for example, to strengthen its air defence capabilities and build an anti-drone system.
Among other neighbouring countries, Slovakia has applied for EUR 2.3 billion (CZK 56.5 billion) from the programme. It intends to use the funds for nine modernisation projects, which include modern logistics vehicles, small-caliber ammunition, the CV90 armored infantry fighting vehicle and the Skysense anti-drone system.
The European SAFE financial instrument was established last year. It is a joint borrowing mechanism designed to boost investment in European defence capabilities in preparation for the threat of military aggression from Russia or Belarus. The program allocates EUR 150 billion (CZK 3.7 trillion) among 19 member states in the form of low-interest loans, so that they can more effectively finance their defence priorities.
