British defence firms are set to miss out on a €150 billion EU initiative aimed at enhancing European military capabilities unless the UK government agrees to a security agreement with Brussels.
The Security Action for Europe (SAFE) programme, which excludes both US and Turkish defence contractors, allows EU member states to finance weapon purchases through loans backed by the EU budget.
In a significant win for France, which has advocated for the EU to encourage purchases within the bloc, the new scheme mandates that at least 65% of weapon expenditure be within the EU, Norway, or Ukraine.
This development was formally announced on Wednesday, amidst the EU’s urgent efforts to increase its military spending in response to Russian hostilities and critiques from Donald Trump concerning outdated defence budgets and the reliability of US security commitments to Europe.
Kaja Kallas, the EU’s chief diplomat, cited “member states’ concerns” as the rationale for excluding the UK, subtly alluding to French influence on the decision. However, she noted ongoing efforts to forge a defence and security partnership with the UK.
Earlier this week, Ms Kallas met with David Lammy, the UK Foreign Secretary, and John Healey, the Defence Minister, in London to discuss potential defence cooperation.
She expressed optimism about achieving a new security agreement at an upcoming UK-EU summit scheduled for May 19, a priority for the Labour party as part of its strategy to “reset” post-Brexit relations.
The exclusion of British companies from the SAFE scheme is a setback for the UK government, which has been advocating for British firms to be recognized as “European” in defence contexts.
Sir Keir Starmer has been actively collaborating with France and other supportive nations, coordinating with Ursula von der Leyen, President of the European Commission, to bolster Ukraine.
This announcement comes as Brussels rolls out plans to potentially mobilize up to €800 billion for various initiatives this month.
