Croatia signs nearly $2B defense loan with EU under SAFE mechanism

Croatia signed an agreement Thursday with the EU for $1.95 billion loan to strengthen its defense as part of the bloc’s joint defense procurement program, according to the Croatian news agency, HINA.

The Croatian government has adopted a decision authorizing the signing of a loan agreement under the European “Security Action for Europe (SAFE) instrument, worth €1.7 billion ($1.95 billion).

The decision was adopted at the 169th session of the government of the Republic of Croatia earlier Thursday. Under SAFE, EU member states will receive loans for priority, significant and urgent defense investments through a joint procurement instrument.

The SAFE scheme, announced in March last year, is part of a broader EU push to rebuild defense capabilities after the Russia-Ukraine war, with the European Commission set to borrow up to €150 billion ($175 billion) to provide long-duration loans to member states.