Tánaiste and Minister for Defence Simon Harris has signalled he is prepared to avail of a €150 billion European Union loan facility to increase Irish military capabilities if the required funding is not available elsewhere.
The comments come following a disagreement between Mr Harris and Minister for Public Expenditure Jack Chambers over the amount of money which should be available for defence in the National Development Plan.
Earlier this year, the Government signed up to the EU’s Security Action for Europe (Safe) regulation which is designed to increase the bloc’s military capabilities and replenish equipment stockpiles depleted by the war in Ukraine.
The regulation will speed up military purchases by cutting through red tape and allowing countries to jointly order materiel from arms manufacturers.
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It is also intended to shore up an independent European defence industry and reduce reliance on US companies.
Ireland will use Safe to speed up the acquisition of various types of military equipment, starting with a new body armour system for Defence Forces personnel. The €16.5 million order is being made in conjunction with another EU country to speed up production times.
So far, however, the Government has opted not to take part in the core pillar of Safe, a €150 billion loan facility for countries to strengthen their militaries.
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The Government is in the process of expanding military spending by 50 per cent by 2028. It is the view of officials that Ireland does not need to avail of the Safe loans due to budget surpluses and the availability of low-cost credit from other sources.
Mr Harris has warned this may change, however. Speaking in the Dáil last week, he said the decision not to draw down any loans from Safe was made in consultation with the Departments of Finance and Public Expenditure and Reform.
He said he expects to speak to both departments again about the possibility of using the loans at a later date. “We do not rule that out at all,” the Tánaiste said.
He said his priority to date has been to maximise the amount of defence spending from existing Government funds but that this may change.
If money for defence investment is not forthcoming “at the pace needed” to deliver on national security commitments, “we absolutely reserve the right, which I intend to activate, to go back and have further engagement with Safe so we do not take ourselves off the pitch in relation to this in any manner or means”.
Earlier this year Mr Harris clashed with Minister for Public Expenditure Jack Chambers over defence spending in the National Development Plan, internal documents obtained by The Irish Times show.
Mr Harris sought nearly €3.4 billion between 2026 and 2030 for capital defence spending to facilitate key strategic projects including military radar, ships and armoured vehicles.
However, Mr Chambers’s department said it would go no higher than €230 million annually in capital funding.
The Tánaiste argued this would see defence capabilities going backwards. Eventually, a compromise figure of €1.7 billion over the five years was agreed.
It is understood Mr Harris believes Safe loans will likely be needed to bring this figure up to the required amount to meet Government commitments on defence.
From the Tánaiste’s point of view, loans under the Safe regulation have the benefit of being ring-fenced for defence, meaning the Government would not come under pressure to use the funds in other areas such as health or housing.
Speaking in the Dáil, Mr Harris said renewed EU investment in defence also provides potential benefits for Irish businesses. “There are huge opportunities for Irish businesses at a time when Europe is going to be spending a lot more in this space.”
