Hungary reduces SAFE defence loan request to €5.4 billion

Hungary has requested a loan of 5.4 billion euros (1,973 billion forints) from the European Union’s SAFE defense loan facility, European Commission spokesperson Thomas Régnier announced at a press conference on Friday. The Hungarian government had previously planned to take out a SAFE loan of 16 billion euros, Hvg.hu has reported.

At Friday’s press conference, a Euronews reporter asked about the situation with Italy and Hungary, as these are the two countries still awaiting final Commission approval with regard to the SAFE loan. The Commission spokesperson responded by saying that progress had been made in both countries, and that they had received new information and updated plans from both the Italian and Hungarian authorities, which are currently being analyzed.

“There will be a bit more than 8 billion euros taken by Italy, and the Hungarian authorities have informed us that they will be taking 5.4 billion euros in the end. We welcome this step. We are in close contact with the Hungarian authorities on the updated plan, which we should receive soon,” said Thomas Régnier, noting that member states can decide how much they wish to borrow, and the European Commission will not reduce the available amounts.

When asked why Hungary is now requesting only 5.4 billion euros instead of the originally planned approximately 16 billion euros, the spokesperson replied: “We have always been very clear with the new Hungarian authorities and government that they would, of course, be able to take stock of the current situation. And they have now decided to take less than what we originally allocated to Hungary.” He added that the remaining loan amount of more than 10 billion euros will be reallocated for a later date.

HVG points out that the Hungarian government was not the only EU government which decided not to use their entire credit line. Consequently, the European Commission will publish a new call for proposals later this year, allowing member states to apply for the remaining funds. The new call for proposals must be published before 2026 is over- otherwise, the funds would be forfeited.

The European Commission proposed a joint loan of up to 150 billion euros last year to help member states develop their defense capabilities and industries. The Hungarian government at the time was the only one not to vote in favor of SAFE in the EU Council of Ministers. Despite this, Minister of Economy Márton Nagy later announced that Hungary had applied for 20 billion euros (8,000 billion forints) from the fund, and the European Commission had allocated 16.2 billion euros (roughly 6,300 billion forints) of that amount—the third-largest allocation in the EU. However, citing the scale of the plan and the necessary bilateral consultations, the European Commission has so far denied approval of the Hungarian plan several times.