Britain has refused to pay the European Union’s £5bn request to join its large rearmament fund, a move that places fresh uncertainty over future involvement for UK defence firms.
UK officials have warned Brussels that pushing Britain out risks weakening the wider effort to deter Russia. Even so, turning down the initial offer means companies based in Britain may miss the first wave of contracts supported by the scheme.
What The EU Scheme Offers
The fund, known as Security Action For Europe, will provide €150bn in loans to help members buy new weaponry. Long range missiles and air defence systems are expected to be among the priorities.
Any equipment bought through the loans must be at least 65 per cent EU made. Brussels had offered Britain the chance to take part if it paid up to €6bn plus a €150m administration fee. In return, UK subcontractors would have been able to contribute half the value of any resulting contracts.
UK Says Terms Are Not Good Enough
Negotiators in London felt the price did not represent fair value. A Government spokesman said: “The UK is committed to a broad and constructive relationship with the EU and we are working together to implement the package agreed at the UK-EU Summit. We will only agree deals that provide value to the UK and UK industry. Nothing has been agreed, and we will not give a running commentary on talks.”
Officials expect discussions to continue as ministers attempt to secure a better offer.
Concerns Over Security And Industry Links
British representatives have told the EU that long-standing links between defence industries on both sides should not be disrupted. They argue that Europe benefits when British expertise is kept inside joint projects.
They have also reminded Brussels that the close integration between the two markets means the UK will still gain some advantages from the scheme even without joining.
Wider Political Tensions
Only Norway and Ukraine currently enjoy full access as non-EU states. France has pushed for strict limits on outside participation as part of a wider effort to strengthen Europe’s own defence industrial base.
The Commission has already agreed to explore membership terms for both the UK and Canada. South Korea and Turkey have also shown interest.
For the Prime Minister, access to the fund had been presented as a significant outcome of his Brexit policy shift. Failure to secure a deal risks renewed pressure to show clear benefits from the wider arrangement, especially as other promised gains, such as simplified food export checks, have yet to materialise.
London and Brussels now face a short window to reach common ground. The UK wants a lower cost and clearer advantages. The EU wants strong European control over the scheme. Whether both sides can land a workable compromise remains to be seen.
