France has proposed limiting the value of British-made military components in the EU's €150bn defence fund to 50%, potentially complicating UK negotiations to join the scheme. The proposal emerged during internal EU meetings as member states prepare a negotiating mandate for talks with the UK government.
The €150bn Security Action for Europe (Safe) fund is part of the EU's broader €800bn defence spending drive. Without a formal agreement, UK firms are currently restricted to supplying no more than 35% of components in Safe-funded projects. The UK hopes to secure a bigger role for its defence industry through a technical agreement, but must also negotiate a participation fee.
A majority of EU member states oppose restrictions on UK involvement, seeking flexibility in defence procurement. One EU diplomat described the proposed 50% limit as 'the classic French obsession'. France has long championed European defence autonomy and argues that post-Brexit Britain should not fully benefit from the single market.
The UK does not intend to apply for Safe loans, which are reserved for EU members, but wants its firms to participate in supply chains for equipment ranging from drones to artillery systems. The European Commission has expressed willingness to reach a 'win-win agreement' with the UK, which is seen as an essential partner and ally.
Negotiations on the UK's entry into Safe are expected in the coming weeks, alongside a parallel process for Canada. The EU's most senior diplomats are due to discuss the matter on Wednesday.
