Bulgaria’s 45-Year Defence Debt

How much should a country borrow for defence when the repayments will outlive every government that signs, debates or administers the deal?

Bulgaria's cabinet sent parliament a €3.26 billion loan agreement on 15 July, signed under SAFE, the EU's new credit line for defence spending (24 Chasa). On paper, the terms are attractive: up to ten years before the principal starts being repaid, with the debt stretched over 45 years (Sofia Globe). But cheap money remains money owed. Final repayments could run until 2071. Bulgarian MPs are being asked to approve the borrowing before most of the projects it will finance have been made public.

How SAFE Works

SAFE allows the European Commission to borrow on the markets using the EU's collective credit rating, then lend that money to member states for defence purchases (CER). The pool is €150 billion. The rules are designed to keep much of the spending inside European and Ukrainian supply chains, with at least 65% of component costs required to remain within the EU, EEA or Ukraine (European Commission).

For Malta, the mechanism matters because this is the EU moving from coordination into balance-sheet power. Brussels is not buying weapons directly. It is using its credit standing to make defence borrowing cheaper for governments, while steering the contracts towards preferred industrial networks. Small states know the logic well: EU financing rarely arrives as neutral cash. It comes with rules about where the money flows and who gets to build capacity.

The EU Council, where national ministers legislate, adopted SAFE through an emergency legal route that excluded the European Parliament from the process. Parliament has challenged that decision before the EU's Court of Justice, arguing that the shortcut was unlawful (European Parliament, EU Law Live). The case is still open.

The money is already moving. Poland has received an initial €6.56 billion, while Croatia has received a first €255 million tranche (European Commission, Brussels Times). The same EU instrument is producing different domestic fights: in Romania, a constitutional row over which government had authority to borrow (Gândul); in Poland, a public clash between the defence minister and the president over signing the law (TVN24).

Bulgaria's dispute is quieter. It is also more basic: what can parliament 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 purchase under a framework agreement with France (24 Chasa). The other eight have no published contract values, no named suppliers, no delivery dates, and no indication of how much work Bulgarian companies will receive (Actualno, 24 Chasa).

Some of that information may genuinely be commercially sensitive or classified for security reasons. Defence procurement is not a kunsill lokali tender for roadworks. But the scale of undisclosed spending is hard to ignore. MPs are being asked to approve decades of repayments for projects they cannot yet properly test.

The fiscal context makes the question sharper. Bulgaria's parliament recently raised the state-debt ceiling to allow €3.8 billion in new borrowing, partly to cover budget liquidity needs, while the country still does not have a finalised 2026 budget (Forbes Bulgaria). The government says SAFE funds will be folded into annual defence budgets, spreading the cost over time. That answer depends on every future government honouring the commitment across a repayment window of 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 real issue is democratic control over long-term debt.

The loan gives Sofia access to Europe's most powerful defence borrowing line. Whether the €3.26 billion produces real military capability, or leaves Bulgaria servicing imported equipment until 2071, depends on details that MPs should have before they vote: the projects, the suppliers, the timelines, and the domestic industrial benefit. Without those answers, ratification becomes less a decision on defence capability than a signature on trust.