Britain has walked away from the European Union's rearmament scheme after France demanded the UK pay £5.7billion. Talks of the UK's involvement in the Security Action for Europe (Safe) programme collapsed following the demands.
This summer, Sir Keir Starmer said participation in the Security Action for Europe (Safe) programme would provide opportunities for the UK’s defence industry. The initiative allows EU member-states to take out low interest loans to jointly procure defence systems.
Negotiations centred around Britain being allowed to contribute up to 50 per cent of the component value of a defence contract. Britain will still be allowed to participate, but as a “third country”, meaning UK defence firms will be competing against the likes of the United States for a limited number of contracts.
Nick Thomas-Symonds, minister for Europe, said: “Negotiations were carried out in good faith, but our position was always clear: we will only sign agreements that are in the national interest and provide value for money. While it is disappointing that we have not been able to conclude discussions on UK participation in the first round of Safe, the UK defence industry will still be able to participate in projects through Safe on third-country terms.”
A European diplomat told The Times the UK did not engage with the process. “Britain really did not want to accept the logic of Safe and what they offered was really peanuts, unacceptable,” they said.
A source claims the UK was not willing to pay significantly into the scheme, offering a number significantly lower than £1billion. French president Emmanuel Macron made high contributions a condition for British participation.
The programme is based on EU loans, guaranteed by the Union’s budget, which have lower interest rates than many European countries. France argues the UK is not entitled to benefit from the programme unless taxpayers “pay to play”.
“If the borrowing rates are excellent, it’s thanks to the internal market that the UK wanted to leave,” the diplomat said. Mr Thomas Symonds said the collapse of the Safe deal would not further affect the UK’s relationship with Brussels.
Keir Starmer and Emmanuel Macron | REUTERSHe said: “We continue to make strong progress on the historic UK-EU May agreement that supports jobs, bills, and borders. In the last fortnight, we have launched negotiations on a food and drink deal and energy deal that will bring down bills and slash red tape for business.”
As a third country, Britain will still be able to contribute to the scheme, but at a lower 35 per cent component value limit.
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