Negotiations to allow British companies greater access to the EU’s €150 billion defense financing scheme have collapsed due to disagreements over fees. The EU was demanding substantial participation fees, while the UK insisted it would not sign an agreement unless it was in its national interest. UK Minister Nick Thomas-Symonds expressed disappointment over the failure to reach a deal, emphasizing that they would only accept terms providing value for money.
The EU’s Security Action for Europe (SAFE) plan, implemented in response to Russia’s invasion of Ukraine, includes funding for military equipment and collective purchases. Though a previous deal allowed UK companies some access to the scheme, they are now restricted to contributing only 35% of the total value of finished products without further agreements.
Nineteen of the 27 EU countries have applied for the loan, which is expected to issue early next year, with Poland receiving the largest allocation. The breakdown in talks has been labeled a “frustrating setback” by the UK defense industry, though hopes remain for future negotiations. Simultaneously, broader talks are ongoing to improve UK-EU relations, including discussions on food border checks and electricity trading. Canada is also in negotiations to join the defense scheme, with the EU seeking an agreement.
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