Croatia to Borrow €1.7bn from EU to Fund Army Modernization

Croatia on Thursday signed a €1.7bn loan agreement with the European Union under the Security Action for Europe (SAFE) mechanism, designed to accelerate the defense preparedness of member states.

SAFE is a €150bn EU financial instrument providing member states with low-interest, long-term loans for urgent defense purchases and industrial capacity building.

Prime Minister Andrej Plenkovic said the 45-year loan would be used mainly to buy German Leopard tanks, French Caesar howitzers, Czech logistics vehicles and various types of ammunition. Croatia signed a memorandum with Germany last year to purchase 44 Leopard 2A8 tanks.

Zagreb also plans to increase defense spending from 2.1% of GDP in 2025 to 2.5% by 2027 and 3% by 2030.

(reuters, bak)