Week Ahead (26 January)

W/C Monday, 26 January – EU expected to approve second batch of SAFE national spending plans; disbursements set to begin in March 

The European Commission and the Council are expected this week to move forward with a second batch of approvals under the EU’s Security Action for Europe (SAFE) programme, the €150 billion joint defence lending instrument designed to accelerate military procurement and support the EU defence industrial base. Most national plans are understood to be on track for clearance, although Poland’s application, which is the largest (€43.7 billion), could take slightly longer to finalise. 

SAFE allows Member States to access long-term loans backed by the EU budget for priority defence investments, including air and missile defence, ground combat capabilities, ammunition and missiles. National plans are assessed by the Commission and then approved through Council implementing decisions, after which bilateral loan agreements can be concluded and disbursements scheduled. 

Earlier this month, the Commission cleared the first wave of SAFE plans, covering Belgium, Bulgaria, Denmark, Spain, Croatia, Cyprus, Portugal and Romania, marking the operational launch of the programme. Those approvals are now moving through the final procedural steps, with loan agreements expected to be signed in the coming weeks. Current planning foresees first disbursements from March, allowing capitals to begin executing procurement projects outlined in their submissions. 

Attention is now shifting to the second batch of approvals, which officials expect to progress this week, ahead of the next SAFE working party meeting on 3 February, where remaining files are due to be discussed. The remaining applicants are Czechia, Estonia, Finland, France, Greece, Hungary, Italy, Latvia, Lithuania, Poland and Slovakia. While some technical work is still ongoing on the largest applications, the overall timetable remains intact, with Brussels keen to demonstrate momentum and scale quickly. 

In recent days, more detailed colour has also emerged on how SAFE funding is expected to be allocated. In a recent interview, Defence Commissioner Andrius Kubilius indicated that roughly €50 billion of the envelope is likely to go to air and missile defence, around €60 billion to ground combat systems and platforms, and approximately €40 billion to ammunition and missiles. The breakdown underlines the EU’s priority on closing the most acute capability gaps and rapidly translating pooled financing into deployable military assets. 

Monday, 26 January – Tuesday, 27 January – EU-India summit to reach potential FTA breakthrough and launch security partnership  

Early this week, European Council President Antonio Costa and Commission President Ursula von der Leyen travel to New Delhi to represent the EU at the 16th EU–India Summit, where they are scheduled to meet Indian Prime Minister Narendra Modi. The summit comes at a politically dynamic moment for both sides, with expectations centred on two headline outcomes: a potential breakthrough on the long-running EU–India Free Trade Agreement (FTA) and the formal launch of a new EU–India Security and Defence Partnership. 

Trade will dominate the agenda. In previous weeks, Brussels and New Delhi entered the decisive negotiating window, after progress in recent months on technical files such as sanitary and phytosanitary rules. Von der Leyen has recently publicly framed the talks as being “on the cusp of a historic agreement”, highlighting the scale of a deal that would link markets of nearly two billion people and close to a quarter of global GDP. The FTA would also fit prominently into the EU’s broader trade diversification strategy, as it seeks to hedge against US–China rivalry, reduce strategic dependencies on China and secure access to fast-growing export markets. 

Despite this growing momentum, several politically difficult issues remain unresolved. These include EU safeguard measures on steel, India’s concerns over the Carbon Border Adjustment Mechanism (CBAM), EU demands for tariff reductions on cars, and lingering questions around intellectual property and regulatory alignment.  A potential resolution by Tuesday could likely include EU guarantees that India would be shieled by upcoming EU tariffs on steel and its CBAM-related costs, with New Delhi in exchange cutting its tariffs on EU cars.  Agriculture is expected to be carved out to facilitate a breakthrough.  

Beyond trade, the summit is also expected to mark a significant step in EU–India security cooperation. EU ambassadors have already agreed the text of a new EU–India Security and Defence Partnership, which is due to be formally adopted by ministers and signed in New Delhi by EU foreign policy chief Kaja Kallas. The partnership will expand cooperation in areas such as maritime security, counterterrorism, cybersecurity and information security. Brussels has increasingly described India as “indispensable” to European economic resilience and supply-chain security, even as differences remain over Russia and Ukraine. 

The agreement also carries longer-term industrial implications. Although India is unlikely to participate in procurements under the current round of the EU’s €150 billion Security Action for Europe (SAFE) defence lending scheme, as national spending plans are already being approved, the partnership is widely seen as paving the way for future participation should a follow-up SAFE instrument materialise. Commission officials have openly acknowledged that SAFE is already heavily oversubscribed, with some Member States calling for an expansion, adding strategic weight to the EU’s effort to anchor India more firmly into its defence and security ecosystem. 

Against this backdrop, this week’s summit will be a litmus test of how far Brussels and New Delhi can translate shared geopolitical imperatives into binding economic and security commitments and whether political momentum is sufficient to close what has been deemed as one of the EU’s most consequential trade deals in decades. 

W/C Monday, 26 January – European Commission likely to announce decision on Epta-Hauser merger 

This week, the European Commission is likely to announce its decision on Epta’s proposed acquisition of Hauser. 

Under the deal, Italy-based Epta, a global supplier of commercial refrigeration systems, would acquire control of Austria’s Hauser, which specialises in refrigeration equipment and services for food retail. The transaction, announced in July 2025, would create a group with around €2 billion in consolidated revenues and a workforce of approximately 10,000 employees. Hauser’s strong footprint in the DACH region and Central and Eastern Europe would complement Epta’s broader European operations, expanding the combined group’s presence across markets including Germany, Austria, Switzerland, Poland, Czechia, Slovakia, Romania, Bulgaria, Hungary, the UK and France. 

Following completion, Epta is expected to hold around 86% of the combined entity, with the foundation established by Hauser’s founding family retaining the remaining 14% and securing representation on Epta’s board. Hauser’s production facilities in Austria and the Czech Republic would be integrated into Epta’s wider industrial network, with the parties positioning the transaction as a means to broaden their product offering across design, manufacturing, installation and maintenance, with a particular focus on sustainability and digital solutions for food retail clients. 

The transaction was referred to the European Commission for EU-level review, and Epta formally requested EU antitrust clearance in December. While the case is provisionally scheduled for a decision on 6 February, the Commission is likely to conclude its assessment as early as this week, suggesting that the deal is progressing smoothly through the review process. 

Thursday, 29 January – Commission set to deliver FSR decision on Tata-Iveco 

On Thursday, the European Commission is expected to deliver its Phase 1 decision under the EU’s Foreign Subsidies Regulation (FSR) in relation to Tata Motors’ €3.8 billion acquisition of European truck maker Iveco. 

Last month, India’s Tata Motors filed a notification with the European Commission. The move represents the final regulatory step for the transaction at the EU level, after the deal was cleared under EU merger control rules in November via the simplified procedure and by Italy under its national golden power regime in late October, following commitments on jobs, know-how and industrial footprint. Importantly, the carve-out of Iveco’s defence business to Leonardo substantially reduced national security sensitivities. 

Under the FSR, which entered into force in July 2023, the Commission assesses whether foreign financial contributions granted by non-EU governments risk distorting competition in the internal market. Unlike EU merger control, the instrument is designed to address regulatory asymmetries between EU state aid rules and third-country subsidies, with outcomes ranging from unconditional clearance to commitments to prohibition. 

While the FSR has so far been applied mainly to Chinese and Gulf state-linked entities and has become a recurring point of friction in EU–China relations, the broader political and geopolitical context surrounding India is quite different. As noted above, Brussels’ current strategic approach towards New Delhi emphasises engagement rather than isolation, underpinned by ongoing EU–India trade negotiations, growing defence and industrial cooperation, and a shared interest in diversifying supply chains away from China. Against this backdrop, instruments such as the FSR are unlikely to be deployed aggressively in the Tata–Iveco case, which is viewed in Brussels as far less politically sensitive than comparable acquisitions involving Chinese or Gulf-backed buyers. 

Given that competition concerns are already cleared at the EU level and political sensitivities have been addressed in Rome, the Tata–Iveco transaction remains on track for an FSR clearance by Thursday, with limited indications at this stage that the Commission’s foreign subsidy powers will materially affect the outcome.