The SAFE program is at a standstill. Minister of Defense of Romania: I will not sign contracts that are 30% more expensive.
Romania’s army modernization plan, financed by billions of dollars in loans from the EU’s SAFE program, has encountered a barrier. Minister Radu Miruță announced that he will not allow the finalization of key contracts if arms producers do not withdraw from sudden price increases. The matter may be brought back to the Supreme Council of State Defense (CSAT), which would mean a complete revision of the current purchasing plans.
The Romanian dispute concerns an instrument Security Action for Europe (SAFE), under which Romania secured EUR 16.68 billion for the modernization of its army, which, after Poland, makes it the second key beneficiary of this instrument on the eastern flank. The funds, provided in the form of preferential loans, were to finance the historic replacement of equipment, including air defense systems, helicopters and hundreds of combat vehicles. The scale of financing places Romania in the role of one of the most important defense pillars of NATO’s eastern flank.
“We won’t pay for rushing”
During a meeting with journalists on Thursday, April 2, the Minister of National Defense and Deputy Prime Minister of Romania did not hide his irritation with the attitude of suppliers. According to the portal’s report HotNews.rothe head of the Ministry of Defense directly accused foreign companies of trying to take advantage of time pressure. The EU framework for the SAFE program requires that the agreements be finalized by the end of May 2026.
– We do not accept prices inflated by 30% just because we sign contracts under time pressure. We are ready to pay for the quality and commitment of the local industry, but not for the margins built on our haste, declared Minister Miruță.
As he says Defense Industry Europethe most difficult situation concerns negotiations with the Rheinmetall concern regarding 298 Lynx KF41 infantry fighting vehicles. Although officially the valuations are a commercial secret, unofficial information indicates that the cost of the contract increased by hundreds of millions of euros just before the planned date of signing the documents.
Minister’s ultimatum: CSAT or “return” to real prices
Minister Miruța’s position, quoted by the website News.rois clear and leaves no doubt.
– As long as I am the Minister of Defense, I will not consent to signing a contract that is 30% more expensive. This option simply does not exist. Either producers will accept the initial price, or we will reconvene the CSAT (Supreme Council of State Defense) meeting, the minister emphasized.
The threat of returning to CSAT is a signal of great chaos resulting from the increase in arms prices. The Council, chaired by the President, approves strategic purchasing directions. Sending the documents there again would de facto mean invalidating the negotiation progress so far and requiring the development of a new strategy. In practice, this could result in failure to meet the May deadline for settlements with the European Union, which would call into question access to part of the EUR 16 billion from the SAFE program.
The battle for Romanian industry
In the background of the price dispute, there is also a fight for the so-called “Romanianization” of orders. The Romanian Ministry of National Defense emphasizes that every billion spent from the SAFE fund must translate into the development of the local industrial base.
Bucharest demands that a significant part of the production and servicing of equipment take place in Romanian plants, including: in Morenia. Minister Miruță suggested that price increases offered by suppliers do not go hand in hand with increasing offsets or technology transfer, which the ministry considers unacceptable.
The end of the era of “blank checks”?
The statement of the Romanian Minister of National Defense may become a turning point for the arms market in Central Europe. Romania’s attitude shows that the countries of the region, despite urgent operational needs resulting from the geopolitical situation, are beginning to impose tough economic conditions.
If suppliers do not lower their financial expectations by the end of April, Romania may enter the path of renegotiating the entire SAFE plan. Now it is up to the arms giants to decide whether they prefer to make margins more realistic or risk a complete freeze of contracts. Choosing the “all or nothing” option. If Bucharest actually “overturns the table” and returns to the CSAT talks, it will set a precedent that may be detrimental to companies across the region.
