UK Must Contribute to EU Defence Fund for Company Access, Starmer Warned
Sir Keir Starmer faces pressure to ensure Britain pays a “proportionate contribution” to the £125 billion EU defence fund if UK arms manufacturers are to gain from European rearmament initiatives. Brussels has indicated that nations outside the EU, including the UK, will be excluded from the scheme unless they formally agree to a security and defence pact.
EU Insists on “Fair Share” for UK Participation
Miguel Berger, Germany’s ambassador to the UK, stated on Times Radio that “EU taxpayers’ funds cannot simply be allocated to British firms.” He suggested a model similar to the Horizon research programme, where “the UK can become involved in the investment and would contribute its fair share to these programmes.” This caution follows confirmation from the EU that non-member countries, such as the UK, United States, and Turkey, will be barred from the fund without formal agreements.
British Defence Sector Faces Potential Setback
This decision is a significant setback for British defence companies, like BAE Systems and Babcock, which have been actively seeking access to the financial resources. The Safe initiative, valued at approximately £125 billion, is designed to bolster Europe’s defence capabilities in response to growing security threats, notably Russia’s conflict in Ukraine.
The fund will generate capital on financial markets and provide loans to EU member states for the procurement of weaponry, including:
- Air defence systems
- Howitzers
- Missiles
- Drones
However, funding eligibility is restricted to companies that manufacture at least 65% of their components within the EU, Norway, or Ukraine.
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UK Government Weighs Defence Pact with Brussels
The UK Government has not yet decided whether to enter into negotiations for a defence pact with Brussels.
Optimism for Agreement Amidst French Influence
Despite the uncertainty, British officials are reportedly “optimistic” about reaching a deal at the EU summit scheduled for May 19. Conversely, France is reportedly advocating for any defence cooperation agreement to be linked to wider post-Brexit discussions, encompassing ongoing disputes over fishing rights and migration.
French President Emmanuel Macron has been a key proponent of greater EU “strategic autonomy” in defence spending. He has actively encouraged European countries to prioritise the purchase of French-produced fighter jets and air defence systems over equipment from non-EU suppliers, including the UK.
Labour Signals Openness to EU Security Pact
Defence Secretary John Healey affirmed that NATO remains the “foundation of our collective security” but indicated the UK’s potential willingness to sign an EU security pact if it aligns with national interests.
“We came into government pledging to reset relations with the European Union. This may present an opportunity for Britain,” he explained.
Exploring Broader UK-EU Defence Collaboration
Beyond the Safe fund, UK officials are also exploring alternative avenues for defence financing collaboration with the EU. The UK is taking a leading role in discussions regarding the establishment of a European rearmament bank, potentially providing up to £100 billion in funding for joint military projects.
Poland, currently holding the EU’s rotating presidency, is advocating for closer defence cooperation between the UK and the bloc. Polish Finance Minister Andrzej Domański told the Financial Times, “I have a very strong feeling that the Polish and UK thinking about defence is very similar.”