The European Union is nearing the official launch of its landmark SAFE loan instrument, which will provide €150 billion in low-interest loans for defense investments by member states. As confirmed by Poland’s Ministry of National Defense (MON), the instrument was formally adopted by permanent representatives of EU countries after weeks of negotiations. The SAFE mechanism is part of a broader EU push to strengthen Europe’s defense and deterrence capabilities, with a focus on building an autonomous and robust European defense industry.
“The European defense industry can and should become self-sufficient. Right now, it isn’t — but to get there, we must invest. Most importantly, we need dedicated funds for buying European-made defense and weapons systems,” said Rafał Modrzewski, CEO and co-founder of ICEYE, a global leader in synthetic aperture radar (SAR) satellite technology, in an interview with Newseria.
Russia’s Invasion Accelerates EU Defense Strategy
The Russian invasion of Ukraine and the subsequent military support extended by Europe exposed critical gaps in the EU’s defense production capabilities. Since then, both national governments and the European Commission have accelerated initiatives aimed at boosting Europe’s defense potential and reducing dependency on non-European suppliers — especially amid uncertain signals from the U.S. administration.
Recent EU actions include:
- European Defence Industrial Strategy (EDIS) – adopted last year to chart a course for EU defense development through 2035.
- Ammunition Production Regulation – to increase EU-based manufacturing.
- ReArm Europe Plan and the “Readiness 2030” White Paper – frameworks to mobilize funding and streamline procurement.
Currently, around 65% of EU military procurements come from outside Europe, much of it from the United States.
“Defense industries are built through contracts. You can see this clearly in the U.S. and China. Europe needs to follow suit. Creating this loan instrument — originally a Polish initiative — is a good step. But much work remains,” Modrzewski added.
SAFE Instrument: Structure and Strategic Significance
Part of the broader ReArm Europe initiative, the SAFE instrument is designed to:
- Mobilize over €800 billion in defense-related investments across EU countries.
- Allow defense spending exemptions from the EU’s excessive deficit procedure.
- Generate approximately €650 billion over four years if member states raise defense budgets by 1.5% of GDP.
- Initially support joint procurement by at least two countries. However, at Poland’s request, the first year will allow single-country contracts.
On May 21, MON announced that the SAFE regulation had been unanimously adopted by EU ambassadors, allowing member states to immediately boost defense spending with improved interoperability and lower overall costs.
“We’ve gone from an unsatisfactory starting point for the Polish Armed Forces and defense sector to a situation where all our goals are met, and the conditions are highly favorable,” said Deputy Prime Minister and Defense Minister Władysław Kosiniak-Kamysz.
“65% of components must be made in Europe, while 35% can come from allied nations like the U.S., UK, Norway, or South Korea. This significantly expands collaboration opportunities. For 12 months, Poland can use SAFE unilaterally — allowing us to finance contracts already signed, such as for the Borsuk infantry fighting vehicle.”
Boost for Polish Defense Industry
The SAFE program is a significant opportunity for Poland’s defense sector, particularly for products like:
- Piorun MANPADS (already delivered to Baltic states and Norway)
- FlyEye drones
- Krab howitzers
- Borsuk IFVs
“To support domestic defense production, we don’t need radical changes — we need smarter procurement. By favoring Polish and European products through well-designed public contracts, we build a market that supports our defense capacity,” said Modrzewski.
Poland also boasts cutting-edge drone and satellite technology, with increasing integration of private space-sector companies into national security frameworks. ICEYE collaborates with multiple NATO and allied governments, providing both radar data and satellites.
In March, ICEYE announced it would begin providing SAR data to NATO’s Situational Awareness Center. On May 14, Poland’s Armament Agency signed a contract with a consortium led by ICEYE and Military Communication Works No. 1 for a MikroSAR Earth Observation Satellite System, including:
- Three radar satellites
- Mobile ground segment
- Mobile satellite antenna
This will provide the Polish Armed Forces with real-time imaging capabilities for operational, battlefield, and civilian uses, such as agriculture, forestry, and infrastructure monitoring.
“Satellite systems are essentially reconnaissance tools — our eyes. They’re crucial for understanding our surroundings and responding appropriately. Without them, we can’t gather the information needed to make strategic decisions,” Modrzewski emphasized.
The first satellite for Poland’s military will be launched this year, with an option to procure three more satellites and ground infrastructure within 12 months. The total contract is valued at approximately PLN 860 million.
ICEYE: A Global SAR Powerhouse
ICEYE owns and operates the world’s largest SAR satellite constellation with 48 satellites launched to date. Their latest models provide 25 cm resolution, enabling precise object detection under any weather and lighting conditions — an advantage over optical imaging systems.
The company’s R&D lab and Satellite Operations Center in Warsaw serve as global hubs, and each satellite includes systems designed and manufactured in Poland.
