Cyprus signs €1.18 billion loan agreement for the EU SAFE defence programme

Cyprus has become the sixth EU member state to sign a loan agreement under the Supporting Ammunition Production Reinforcement (SAFE) programme, securing €1.18 billion in funding. The agreement was signed by European Commissioner for Defence Andrius Kubilius and Commissioner for Budget Piotr Serafin on behalf of the European Commission, and by Cypriot Finance Minister Makis Keravnos and Head of the Public Debt Management Office Chrysavgi Chrysostomou-Lapathioti on behalf of Cyprus. According to Defence Minister Vasilis Palmas, the funds will be used to modernise the armed forces, improve interoperability, and foster the development of the local defence industry. The minister clarified that the full €1.18 billion will only be drawn as necessary for specific defence requirements. Further procedural steps remain before the first funding tranche can be released, requiring coordination with the Ministry of Finance to ensure financial oversight. The initiative is part of a broader EU effort to enhance the bloc's collective defence readiness and industrial capacity. While local government officials emphasize the strategic benefits for national security, the loan must be managed in alignment with national budget priorities.