Cyprus receives first loan installment under EU defense initiative

On June 18, 2026, the Republic of Cyprus received an initial payment of €177.2 million from the European Union's Security Action for Europe (SAFE) funding instrument. This amount represents 15% of a total allocated credit package of €1.2 billion. Unlike grants, the SAFE program provides loans to member states that must be repaid over time. The funding is intended for investments in military capabilities, including the joint procurement of ammunition, missiles, air defense systems, and land combat vehicles produced within the EU. This initiative is part of the broader ReArm Europe/Readiness 2030 plan, which seeks to mobilize over €800 billion in defense investments across the Union to reduce reliance on external suppliers. EU Commissioner for Defense and Space, Andrius Kubilius, stated that the financing supports Cyprus in enhancing its resilience and military infrastructure. While official communications highlight the security benefits, critics emphasize that these funds constitute repayable debt rather than subsidies.