Negotiations between the European Union and the United Kingdom regarding British access to European defense billions have failed. The difficult attempts at rapprochement between the EU and the UK since Brexit have thus suffered a further blow.
This spring, European Commission President Ursula von der Leyen announced that the EU wants to play a leading role in European defense by making 150 billion euros in loans available. With the money from that pot, EU countries can borrow money on favorable terms to make defense purchases, provided they cooperate with at least one other EU country. The borrowed money must be repaid in full to the EU.
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European industry and economy should also benefit from this defense fund, called SAFE: countries borrowing from the fund were not allowed to spend more than 35 percent of the money in countries outside the EU. An exception was made for countries in the European Free Trade Association (such as Norway) and for Ukraine: they participate as fully as the EU countries.
Entrance ticket
The UK, which is not in the Free Trade Association, also wanted to participate so that the British defense industry could benefit to a greater extent. Better access to the defense fund was a reason for Prime Minister Keir Starmer to make a number of concessions to the EU this year when concluding a new agreement, the first agreement between the EU and the UK since Brexit.
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But the door to the defense fund will not open any further for the time being. The British and Brussels negotiators could not agree on the price tag. When the EU asked for 6.7 billion euros as an entrance fee, the British offered 75 million euros – a fraction of the amount requested. The EU then lowered the asking price to 2 billion euros, but… more than 200 million euros wanted London according to sources from the Financial Times don’t bid.
Within the EU there is a sharp dividing line between member states that welcome cooperation with like-minded countries and member states that want to do as much as possible within Europe. France is considered the leader of the latter camp, while the Netherlands is in the first group.
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