Catherine Callaghan (Carlow-Kilkenny, Fine Gael)
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12. To ask the Taoiseach and Minister for Defence to provide an update on Ireland's proposed participation in the EU's SAFE initiative; and if he will make a statement on the matter. [59616/25]

Simon Harris (Wicklow, Fine Gael)
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Gabhaim buíochas leis an Teachta Callaghan as an gceist. SAFE, which stands for Security Action for Europe, is an EU instrument designed to provide member states with up to €150 billion of loans backed by the EU budget to provide financial assistance to member states to support their urgent public investments in defence, increase production capacity, improve the availability of defence products and address capability gaps. Ireland supported the adoption of the SAFE instrument and is availing of possibilities available under the SAFE regulation which will allow our country to realise our ambition more quickly and more efficiently. I am determined to provide for the development of a full spectrum of Defence Forces capabilities that will bring Ireland in line with other similar-sized European countries when it comes to defence and security. The Government continues to invest significantly in defence through our national budget. We saw an increase in capital funding to €1.7 billion. The funding represents an increase of 55% on the figure for the previous five years or €600 million. This increase in funding will be utilised to address long-standing capability gaps, modernise core infrastructure needs and support the delivery of defence responsibilities.

In the first instance, I have agreed that the Department of Defence should leverage the common procurement opportunities offered under the SAFE regulation as much as possible, so we have decided to opt in to the common procuring under that regulation. By procuring jointly Ireland can achieve lower prices, quite frankly, than we could if we were procuring alone and we will not be competing against other member states for limited resources and we should be able to access additional capabilities more quickly. That is part 1 of the regulation. With part 2, the question is whether we want to draw down loans under the funding mechanism. A decision was taken in conjunction with the Departments of Finance and Public Expenditure, Infrastructure, Public Service Reform and Digitalisation not to draw down funding via the loan mechanism at this time. However, I have engaged and I expect a second round of calls to be made about that, so we do not rule that out at all. We have prioritised very significantly increasing our capital and current budgets for defence. That is where we are putting our initial resources. We are using the procurement mechanism to jointly procure while keeping the option open to opt in to a loan or funding mechanism at a future date.

Catherine Callaghan (Carlow-Kilkenny, Fine Gael)
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I thank the Tánaiste for his response. It is very important to acknowledge the marked increase in our defence budget. We are making good progress and it is really important that this momentum should continue. I mention the second part of the SAFE regulation, which is the loan. One way I would have liked to have seen this momentum continue was through availing of the SAFE loan. It was a loan that was very competitively priced and had a long maturity and for me it is a missed opportunity. I understand fully the logic of not wanting to borrow money when we have a very healthy surplus thanks to the work and commitment of the Ministers, Deputies Donohoe and Chambers, but this loan had other advantages too. It would have really bolstered Ireland's commitment to European solidarity and security, especially in light of the ongoing war in Ukraine and increasing threats to our critical infrastructure, including undersea cables that are vital to Ireland and the EU's digital economy, but also to our democracy.

Simon Harris (Wicklow, Fine Gael)
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On the joint procurement under SAFE, we have already opened up the contract for the supply of integrated modular body armour systems to other member states, so we are now providing opportunities for other EU countries as well. This means the work of doing more together, co-operating and playing our part in SAFE has started.

On the loan facility, if we think of a domestic household, the credit unions offer very favourable rates but if people have a load of money sitting in their own savings accounts, they do not go down to the credit union to borrow. That was the decision we made in the first instance. I want to be clear as Minister for Defence and as a coalition leader that if money is not forthcoming at the pace needed to get to LOA 2 and deliver for the men and women of Óglaigh na hÉíreann and for national security, 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. However, our collective priority was to maximise the amount we get into our own capital plan through the money we have in this country and that is where we have put our energy in the first instance. That said, I certainly do not rule out, and have had conversations about, further SAFE calls from a borrowing point of view that may happen in the future which we may well avail of.

Catherine Callaghan (Carlow-Kilkenny, Fine Gael)
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I thank the Tánaiste. That is very reassuring to hear. The logic of creating the SAFE regulation was to ensure EU money stayed in the EU to support and encourage European enterprises to be developed with the long-term goal being to strengthen Europe's industrial and technological base. At a recent defence committee meeting, the Department of Defence said that out of the €340 billion spent on defence purchases by European countries, 80% of that went outside the EU. It is to be applauded, therefore, that the EU is working in this way to ensure our industries and economies will benefit from the necessary increase in defence spending across the Union. There is no doubt that in a small nation like ours the opportunities for economies of scale in procurement are greatly increased by us joining other defence forces across the EU for procurement purposes. As the Tánaiste has said, we get better value for the State's money and equipment can be delivered more quickly too.

What measures is Ireland taking to ensure our SMEs are promoted to other member states as being open for business and part of SAFE procurement options to ensure Irish SMEs have the opportunity to join international consortiums and secure opportunities in high value sectors?

Simon Harris (Wicklow, Fine Gael)
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The Deputy is entirely correct the benefit of being able to jointly procure is real. It is real in terms of speed and value for money. She is also right that if we have learned anything over the recent period with a war on the Continent of Europe and the turbulent trade environment, it is that being more resilient as a European Union and the opportunities that gives us in terms of our security and defence - but also those economic opportunities to produce equipment within the European Union - are real. I am currently in discussions with the Minister for Enterprise, Tourism and Employment on how we look at the mandate of Enterprise Ireland to enable it to assist Irish SMEs that may well be able to do more in this space and wish to do more but perhaps have not been covered by the existing Enterprise Ireland mandate. There are huge opportunities for Irish businesses at a time when Europe is going to be spending a lot more in this space. I will ask the Minister to keep the Deputy updated on that too.