Negotiations between the United Kingdom and the European Union about the UK’s participation in a large European defence technology programme have stalled, according to a report, after Brussels rejected the level of financial contribution proposed by London. The impasse mirrors the increase of differences between the two sides on the issues of defence cooperation and commitments to funding as Europe is speeding up the process of strengthening its military capabilities in response to the rising number of geopolitical threats.
The UK was exploring the possibility of a contribution to the Security Action for Europe (SAFE) fund, a comprehensive financial instrument worth hundreds of billions of euros aimed at supporting EU member states and trusted partners in strengthening defence technology, research, and industrial capacity, according to The Financial Times. Nonetheless, the officials acquainted with the talks say that the UK offer – allegedly in the range of several tens or hundreds of millions of pounds – was much lower than what the EU had anticipated.
EU officials are thought to have informed the UK of their expected financial commitment at around €2 billion (£1.75 billion), while they justified such a high figure by citing the size and the cutting-edge nature of the UK’s defence industry. Consequently, London’s offer was turned down as being inadequate, and hence, the discussions are at a standstill with no agreement having been reached.
Mismatch in Funding Expectations
Even though the UK was required to pledge significantly more than any other international partner, the EU is still setting different contribution levels for each party based on their economic prowess and level of innovation in the defence industry. In that respect, Canada, a country invited to be part of the initiative as well, would only be committing to a few tens of millions of dollars – a figure that is considerably less than what Brussels is asking of London.
The main reason for the EU to put the UK at the forefront might be the latter’s role as a top global advanced technology manufacturer in various fields of the defence sector, such as aerospace, cyber, and military, where UK innovations could quickly leverage SAFE funds’ programmed activities. Therefore, in both economic and competitive terms, the Commission thinks the UK deserves a bigger share.
However, London opponents maintain that making such a contribution request that is almost 20 to 30 times larger than that of other non-EU partners is an indication of a political, rather than a technical, decision, and that consequently, it may result in reduced cooperation among European defence industries when they need it most.
The SAFE fund is a tool to address security threats that have been increasing in Europe since the beginning of the Russian aggression in Ukraine, which has exposed shortages in the areas of munitions, drone systems, air defence technology, and production capacity. It is designed to entice quicker investment in next-generation military hardware and build pan-European defence autonomy.
By allowing the United Kingdom, the home of the world’s most technologically advanced defence companies like BAE Systems, Rolls-Royce Defence, and MBDA, into the supply chain, the EU would be benefitting from not only technical expertise but also supply chain depth and manufacturing scale. As for the UK, the fund would act as a source of strategic financial support and a way to foster shared research collaboration despite the post-Brexit separation from EU institutions.
Experts indicate that the dispute is a manifestation of the bigger issues concerning the alignment of the post-Brexit British defence with European strategies or its further leaning towards US-led constructs such as AUKUS and NATO’s industrial acceleration initiatives.
The talks are still ongoingA spokesperson for the European Commission indicated that the negotiations have not been formally concluded and underlined that the UK could still take part if it raised its contribution. “The UK can still benefit from the fund,” the spokesperson commented and added that decisions regarding investments will not be done for a few months, hence there is still room for discussion.
In response to this, officials in London have kept silent but they are speculated to be evaluating whether the anticipated financial obligation is in line with the UK’s strategic interests and the priorities of the domestic industrial policy.
Unsettled Question of EU-UK Defence Cooperation
The breakdown of the negotiations is pointing to the ongoing disagreements over collaboration frameworks between the UK and the EU despite the consensus that Europe is in dire need of closer defence coordination. The continuation of the war in Ukraine, the eruption of the Middle East crisis alongside the increased defence spending across NATO all add to the political sensitivity and strategic significance of the question of whether the UK will come back to the European defence structures, even on an informal basis.
Perhaps whether London and Brussels manage to overcome the funding impasse in the near future will determine not only the duration of the cooperation but also its very existence on the continent.
