Bulgaria weighs €3.26 billion in 45-year defense debt

How much should a country borrow for its military when the repayment schedule outlasts every government that will ever touch it?

Bulgaria's cabinet sent parliament a €3.26 billion loan agreement on July 15, signed under SAFE (Security Action for Europe), a new EU-backed credit line for defence spending (24 Chasa). The terms look cheap: up to ten years before principal payments start, stretched across 45 years (Sofia Globe). But cheap credit is still debt. Final repayments could run until 2071. And MPs are being asked to approve the borrowing before most of the projects it will fund have been disclosed.

How SAFE Works

SAFE lets the European Commission borrow on capital markets using the EU's collective credit rating, then relend to member states for defence purchases (CER). The total pool is €150 billion. Its rules steer contracts toward European and Ukrainian supply chains, requiring at least 65% of component costs to stay inside the EU, EEA or Ukraine (European Commission).

The EU Council (where national ministers legislate) adopted SAFE using an emergency legal route that cut the European Parliament out of the process entirely. Parliament has since challenged this at the EU's Court of Justice, arguing the shortcut was unlawful (European Parliament, EU Law Live). The case remains open. The money is already moving: Poland has received an initial €6.56 billion, and Croatia a first €255 million tranche (European Commission, Brussels Times). Other SAFE borrowers are already finding that the same EU credit line creates different domestic fights, from constitutional standoffs in Romania over which government had the authority to borrow (Gândul) to a public clash in Poland between the defence minister and the president over signing the law (TVN24).

Bulgaria's version of that fight is quieter but no less consequential. It concerns what parliament can actually see before it votes.

Nine Projects, One Public

Bulgaria's loan covers nine Armed Forces projects under a Defence Investment Programme running to 2032 (Actualno). Only one has been made public: a €320 million radar acquisition under a framework agreement with France (24 Chasa). The remaining eight have no published contract values, no named suppliers, no delivery dates, and no indication of how much work Bulgarian firms will get (Actualno, 24 Chasa).

Some details may be commercially sensitive or classified for legitimate security reasons. But the scale of undisclosed spending is striking. MPs are voting on decades of repayment obligations for projects they largely cannot evaluate.

The fiscal context makes this sharper. Bulgaria's parliament recently raised the country's state-debt ceiling to accommodate €3.8 billion in new borrowing, partly to cover budget liquidity needs, while the country still lacks a finalised 2026 budget (Forbes Bulgaria). The government maintains that SAFE funds will fold into annual defence budgets, spreading the cost across years. That works only if every future government honours the commitment across a repayment window stretching nearly half a century.

The Real Ratification Test

Bulgaria's problem is not access to money. SAFE offers the cheapest defence credit a country like Bulgaria is likely to find. The problem is asking parliament to approve long-term debt without showing most of the projects, the suppliers, the delivery timelines, or how much domestic industrial capacity the spending will build. The loan agreement gives Sofia access to Europe's most powerful defence borrowing line. Whether the €3.26 billion produces real military capability or becomes four decades of debt servicing on imported equipment depends on answers that Bulgaria's MPs owe the public before they vote.