UK and EU Defence Deal Talks Stall Over Funding and Rules of Origin
Brussels – negotiations between the United Kingdom and the european Union regarding a notable defense pact have reached a standstill, primarily due โขto disagreements overโ financial contributions and the sourcing of components, according to sources familiar withโฃ the discussions. The impasse threatens โฃto limit โขBritish participation in a key EU initiative designed to bolster Europe’s โdefense capabilities amidโ heightened geopolitical tensions.
The proposed agreement centers around the โEuropean Defence Fund (EDF) and โฃtheโ security Assistance for Ukraine (SAFE) โขmechanism. While the UK has expressed strong interest in collaborating with the EU on โคdefense matters – viewing it as complementary to bilateral partnerships with individual member states – substantial hurdles remain. At issue is a UK contribution to the EDF, which London believes should reflect only โคadministrative and loan guarantee โคcosts, โrather than โขa fee simply โfor access. A U.K.โฃ official stated it was “not reasonable to pay the EU just for the privilege of access.”
Theโฃ current rules of the SAFE program, which provides financial support for defenseโฃ companies, allowโข components from non-member countries to constitute up to 35 percent of a product’s value.โข The UK is pushing for โthis threshold to be raised to 50 percentโค or higher, a change that would considerably increase the participation โคof its robust defense industry.
The situation follows a period of warming relations between UK Prime minister rishi Sunak and European โคCommission President Ursula von der leyen, who exchanged positive remarks in May.Despite this โdiplomaticโ progress,the financial and technical complexities of the defense agreement are proving difficult to overcome.
The UK maintains it is indeed adoptingโค a “pragmatic approach” and views a strong EU-UK relationship as a crucial element in strengthening European defense alongside bilateral ties โwith memberโค states. Though, resolving โthe current disagreements will be essential to unlock deeper collaboration and ensure the UK can fully contribute to the continent’s security architecture.
Jon Stone contributed to this report.
