How Canada Can Strengthen EU’s Defence Ambitions
Ottawa’s participation in SAFE can expand Europe’s defence industrial base and deepen security co-operation among like-minded middle powers. A commentary by Rosalba Famà
More than a year has passed since the European Commission and the EU High Representative for Foreign Affairs and Security Policy unveiled the Union’s rearmament strategy.
Through ReArmEU, subsequently reframed as the White Paper for European Defence: Readiness 2030, the EU has begun strengthening its deterrence capabilities in response to a rapidly deteriorating international environment: more than four years of war in Ukraine, a high-intensity conflict in the Middle East, repeated unauthorised incursions into EU airspace and widespread hybrid threats.
Donald Trump’s re-election has also made US support for the Atlantic Alliance less certain, weakening confidence in the deterrent power of the mutual-defence clause enshrined in Article 5 of the North Atlantic Treaty.
At Davos, Canadian Prime Minister Mark Carney described the present geopolitical moment as a rupture in the global order rather than a transition. He urged allies to adopt a different approach to the new environment, proposing, in particular, a coalition of “middle powers”.
Invoking Václav Havel’s celebrated essay The Power of the Powerless, Carney called on like-minded countries to join forces. He presented Canada as a reliable and economically resilient partner, aligned with Europe on fundamental rights, the rule of law and respect for democratic values.
One of the first steps towards closer military co-operation between the EU and Canada is Ottawa’s participation in SAFE, the Security Action for Europe programme. SAFE is one of the pillars of the White Paper for European Defence and has a lending capacity of €150bn.
Under the programme, the EU raises funds on financial markets and distributes them as loans to Member States that have requested support.
The EU’s outstanding debt is now approaching €1tn, and the Union enjoys a triple-A credit rating. SAFE’s legal and financial architecture therefore allows some Member States, including Italy, to borrow on more favourable terms than they could obtain independently on capital markets, making public spending more efficient.
As Italian Defence Minister Guido Crosetto acknowledged during a hearing before the joint Foreign Affairs and Defence Committees of the Chamber of Deputies and the Senate, SAFE loans effectively provide an alternative to issuing national government bonds.
However, access to SAFE funding comes with European conditions. Following the model of the Recovery and Resilience Facility, resources are disbursed only after the approval of dedicated defence industrial plans. They may be used only for specified categories of military investment, preferably involving products made in Europe or in countries with which the EU has established security and defence partnerships.
SAFE also seeks to encourage joint procurement of certain military products by aggregating demand. A Member State receiving SAFE loans must co-operate with at least one other Member State, an EEA or EFTA country, or Ukraine.
So far, 20 Member States have submitted requests and the Council has approved 16 SAFE plans. Poland is the largest beneficiary, with €43bn, reflecting its geographical position, its proximity to Ukraine and its role on NATO’s eastern flank. Italy has provisionally secured €14.9bn, although an intense domestic debate continues over how the money should be used. It is also notable that Denmark, despite holding a triple-A credit rating, has requested €46mn in SAFE loans.
Canada’s entry into SAFE therefore carries both strategic and symbolic significance. It reflects a reorganisation of the Atlantic Alliance’s internal geography.
In practical terms, the EU is opening SAFE-funded defence procurement to Canadian companies. In return, Canada will contribute financially to the instrument.
At a time of renewed rivalry among great powers, Carney has argued that middle powers are not powerless. By acting together, they may still avoid the world captured in Thucydides’ famous dictum in the Melian Dialogue: “The strong do what they can and the weak suffer what they must.”
A previous version of this article was published by Il Sole 24 Ore
IEP Bocconi does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.
