Romania’s Economy and Defense ministries will fund projects worth EUR 3.5 to 4 billion through the EU-backed Security Action for Europe (SAFE) program. The contracting section of the program will be partially concluded at the end of May this year.
The two ministries, headed by reformist ministers part of the center-right Save Romania Union (USR) party, said they have defined localization criteria for future contracts so that production, jobs, and professional training take place in Romania.
“The SAFE program will be partially concluded, at the contracting level, at the end of May, and partially somewhat later. The Ministry of Economy, together with the prime minister’s Chancellery, the Defense Ministry, and other contracting force institutions, has defined localization criteria. These are proposals for future contracts, in order to ensure a maximum percentage of production, jobs, and professional training that take place in the country. Negotiations with possible suppliers will follow,” said economy minister Irineu Darău, according to Digi24.
He also specified that there will no longer be capital increases for state-owned companies in the defense sector.
“There is already a lot of capital available. All subsidiaries of ROMARM [the state-owned producer and exporter of military products] together have RON 1.5 billion cumulatively. Increasing capital was no longer necessary as it happened every year,” Darău mentioned.
Defense minister Radu Miruță mentioned that SAFE runs 21 new procurement programs, and that the ministry he heads manages projects worth EUR 9.53 billion.
“We have 11 projects that represent about 70% of the EUR 9.53 billion value, meaning somewhere around EUR 6–6.5 billion, from which the Ministry of Economy will tell us what percentage it requests to be localized in the national armament industry. The Ministry of Defense is a client of these products,” Miruță said in a statement given to the press at Parliament, adding that 50-60% is the average localization of these productions in Romania.
Romania has EUR 16.68 billion in soft loans allocated by the European Commission through the SAFE program to start its largely defunct defense industry. Overall, SAFE grants EU member-states with a budget of EUR 150 billion, in the form of low-interest loans.
Regarding a possible withdrawal of Poland from the SAFE program, Miruță explained that Romania’s situation is different. While Poland has the financial capacity to access money from the banking market under conditions identical to those in SAFE, “for Romania, accessing money from SAFE is about two to two and a half times more advantageous than accessing the same money through loans from the free market,” according to the defense minister.
(Photo source: Radu Miruta on Facebook)
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