Sir Keir Starmer has been warned that Britain must pay its “fair share” into a £125billion EU defence fund if UK arms companies are to benefit from Europe’s rearmament efforts. The EU has made it clear that non-member states, including the UK, will not be able to access the scheme unless they sign a formal security and defence pact with Brussels.
Miguel Berger, the German ambassador to the UK, told Times Radio: “Obviously EU taxpayers’ money cannot go simply into British companies. But we can do it like in the research programme Horizon; the UK can become part of the investment and would pay its fair share in these programmes.” The warning comes after the EU confirmed that non-member states, including the UK, United States, and Turkey, would be excluded from the fund unless they signed formal agreements with Brussels.
The decision marks a major blow to British defence firms, including BAE Systems and Babcock, which had been lobbying to access the fund.
The Safe initiative, worth roughly £125billion, aims to boost Europe’s defence capabilities in response to rising security threats, including Russia’s war in Ukraine.
It will raise money on financial markets and issue loans to EU member states to purchase weapons, including air defence systems, howitzers, missiles, and drones. However, only companies that produce at least 65% of their components within the EU, Norway, or Ukraine will qualify for funding.
The UK Government has yet to decide whether to enter negotiations for a defence pact with Brussels.
However, British officials are reportedly “optimistic” that a deal could be reached at an EU summit on May 19.
Nevertheless, France is understood to be pushing for any agreement on defence cooperation to be tied into broader post-Brexit talks, including disputes over fishing rights and migration.
French President Emmanuel Macron has been a driving force behind the EU’s push for greater “strategic autonomy” in defence spending.
He has urged European nations to prioritise purchasing French-made fighter jets and air defence systems over equipment from non-EU suppliers, including Britain.
Defence Secretary John Healey said NATO remained the “cornerstone of all our security” but suggested that Britain would be open to signing an EU security pact if it was in the national interest.
He explained: “We came into government promising to reset relations with the European Union. This may be an opportunity for Britain.”
Beyond the Safe fund, British officials are also exploring other ways to collaborate with the EU on defence financing.
The UK is leading discussions with respect to the creation of a European rearmament bank, which could provide up to £100billion in funding for joint military projects.
Poland, which holds the EU’s rotating presidency, is calling for closer defence cooperation between Britain and the bloc.
Polish Finance Minister Andrzej Domański told the Financial Times: “I have a very strong feeling that the Polish and UK thinking about defence is very similar.”
