Romania greenlights signing SAFE loan memorandum with European Commission

During an extraordinary meeting, the outgoing government of Romania adopted on Tuesday, May 5, a memorandum regarding the signing of the loan agreement related to the 'Security Action for Europe' (SAFE) fund.

According to the agreement signed between Romania and the European Commission, the former will gain access to EUR 16.68 billion. After signing, the agreement will enter the approval procedure by law, in accordance with national legislation on public debt, according to Digi24.

In total, the European Union is extending loans worth EUR 150 billion with favorable interest rates to member states. The funds are intended for investments in the defense sector and were extended as a reaction to Russian aggression against Ukraine. Romania has the second-largest allocation within the program, after Poland.

According to the framework established by the SAFE regulation, two documents will be concluded between the European Commission and Romania: the loan agreement and an operational agreement. The first establishes the financial conditions and the period during which the funds are available, while the second defines the link between project implementation and access to the money.

The funds will be granted in tranches, conditioned on the fulfillment of milestones established through Romania’s Investment Plan. The deadline for using the amounts is December 31, 2030.

The European Commission will grant a pre-financing worth 15% of the total loan value, equivalent to approximately EUR 2.5 billion, after the agreement enters into force. This amount will later be deducted from future tranches until full compensation, no later than December 31, 2028.

Romania’s Ministry of Finance will manage the funds allocated to Romania through SAFE, while the prime minister’s Chancellery will be the general coordinator of the plan.

(Photo source: gov.ro)