The Government is weighing whether to apply for a share of roughly €21 billion in cheap, long-term EU defence loans, a year after the Department of Finance blocked a Defence Forces plan to borrow up to €100 million under the same scheme.
The European Commission has this week invited member states to apply for a second round of borrowing under SAFE, short for Security Action for Europe, The Irish Times reported on Saturday. The money is what is left over after the first round was carved up.
What is SAFE?
SAFE was set up by the European Commission in response to the growing threat from Russia. The plan is to raise €150 billion, borrowed against the EU’s common budget, and lend it on to member states for defence and security spending, with repayment spread over 45 years.
Nineteen of the 27 member states took up loans in the first round, according to The Irish Times. Last year the Irish Examiner reported that Portugal (€5.8 billion), Slovakia (€2.3 billion), Czechia (€2 billion), Croatia (€1.7 billion) and Cyprus (€1.2 billion) were among the countries drawing down funds. After the Commission assessed and approved national plans over the past year, about €21 billion was left unspent.
How Ireland said no the first time
When the scheme first opened, the Department of Defence, then led by Simon Harris, sought to borrow up to €100 million to upgrade Defence Forces equipment. Officials suggested the money could replace the Air Corps’ turboprop trainer aircraft or buy new light tactical armoured vehicles for the Army.
The then finance minister, Paschal Donohoe, vetoed the plan. His department’s main argument was that the State could borrow more cheaply on the open markets. Defence officials disputed this, arguing that the scheme’s other benefits outweighed a marginally better market rate, The Irish Times reported in February.
At an Oireachtas committee in October 2025, a senior Defence official, Brian O’Meara, defended the decision, saying the SAFE rate was higher than Ireland could get on the market. Independent senator Gerard Craughwell, a former member of the Defence Forces, called the decision not to use the scheme outrageous.
Has anything changed?
Politically, yes. In February, Tánaiste Simon Harris said on RTÉ’s This Week that Ireland should take part if the scheme reopened, giving two reasons: the need to increase defence spending, and European solidarity in protecting Irish seas and airspace. He said: “We cannot, as a country, convince ourselves that we are in any way immune.”
Defence Minister Helen McEntee has also said she would be open to using the loans in a second round.
The Department of Defence is more cautious. A spokesman told The Irish Times that any decision would be part of a broader assessment of the State’s defence priorities, and that the department keeps EU defence funding initiatives under constant review. Any application would also need sign-off from the Departments of Finance and Public Expenditure, the two departments that blocked or questioned the idea last time.
The economic argument has not really moved. Ireland can still borrow on the markets more cheaply than most European countries, which weakens the financial case. The bigger significance would be the signal: drawing down SAFE money would show that Dublin wants to be seen doing more on defence alongside its EU partners.
What it means for you
For taxpayers, the sums involved are small relative to the national debt, and the money would be borrowed either way. The real question is political: how far Ireland, a militarily neutral state, is willing to tie its defence spending to EU structures. The Government has already said it will take part in the joint procurement side of EU defence plans, where countries pool purchases, and it plans to buy hundreds of armoured vehicles and long-range radar systems through a supply arrangement with French defence industry.
What happens next
No application deadline has been reported. The Department of Defence is expected to assess its options before any proposal goes to Finance and Public Expenditure, and then to Cabinet. With the triple lock legislation and the end of Ireland’s Unifil mission in Lebanon also on the agenda, defence and neutrality look set to be a running theme when the Dáil returns from its mid-term break. Opposition parties are likely to resist anything they see as a drift away from neutrality.
Sources
- The Irish Times: State considering bid for part of €21bn EU ‘defence’ loans after previous plan was vetoed by minister (31 October 2026)
- The Irish Times: Ireland should avail of EU loans for defence if scheme reopens, says Harris (16 February 2026)
- Irish Examiner: Ireland not using soft EU defence loan fund as markets ‘cheaper’ (22 October 2025)
Featured image: Berlaymont building Brussels by KenSwe72, CC BY 4.0, via Wikimedia Commons.
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