EU warns Italy: decide on €14.9bn SAFE defence loans within a month or lose them

EU ultimatum

The European Commission has warned Italy that it has "one month" to decide on using its allocated €14.9 billion from the SAFE defence loan programme, or the funds will be redistributed to other member states. A senior EU source told ANSA that "clarity will be needed soon," noting high interest from other capitals. The warning is not legally binding, the SAFE regulation allows redistribution of unused funds until 31 December 2026, but Brussels is pressing Rome to act before the summer.

Rome's internal debate

Economy Minister Giancarlo Giorgetti said the decision will come "by September at the latest," linking it to the broader budget framework and Italy's possible exit from the EU's excessive deficit procedure. Defence Minister Guido Crosetto acknowledged the tension: "Giancarlo knows perfectly well what I would like, and I know perfectly well what he can do. On SAFE it depends on the possibilities he has." Crosetto added that he expects the 0.15% of GDP annual defence spending increase, missed this year due to the deficit procedure, to be restored in the next budget.

What's at stake

If Italy loses the SAFE loans, several procurement programmes face cuts. The Army Armoured Combat System, a €15 billion project for 1,050 vehicles developed by Leonardo and Rheinmetall, had €8.4 billion in national funding and relied on SAFE for the remainder. A Vulcano-class logistic ship by Fincantieri, with an estimated 1,500 jobs at risk in Castellammare di Stabia, is also in doubt. The Samp/T NG air defence system, pursued with France, may proceed without Italy if Rome delays further.

SAFE programme status

SAFE (Security Action for Europe) is a €150 billion EU instrument offering 45-year loans with a 10-year grace period for joint defence procurement. It entered into force on 29 May 2026. Eighteen member states have had their programmes approved; nine have signed executive agreements. Poland was the first to receive a payment (€6.6 billion of its €43.7 billion allocation) on 29 May. Latvia signed its €3.5 billion tranche last Saturday. Cyprus and Poland have already received funds. Hungary, under new Prime Minister Peter Magyar, is still redefining its participation after the previous government's plan was blocked.

Timeline and next steps

The Commission is still finalising contracts with other capitals. Italy, Spain, and Portugal are among the latecomers in submitting the required loan-term forms. While the Iberian countries do not worry Brussels, the Commission fears Rome may scale back its request, press reports of a possible €10 billion cut were never discussed with EU officials. Giorgetti hinted at a possible "surprise" regarding the deficit procedure, saying "the probabilities are not very high but I continue to hope." The NATO summit in Ankara expects "credible" paths to the 5% GDP spending target by 2035.