The United Kingdom and the European Union announced Friday that negotiations over British participation in the EU defence industry aid programme, worth €150 billion in loans, have failed.
The programme, known as Safe, was designed to boost Europe’s defence industry amid concerns over Russian threats and potential US disengagement from Europe.
UK Minister for Relations with the EU, Nick Thomas-Symonds, described the outcome as “disappointing.” However, British defence companies can still join projects related to Safe under conditions applicable to third countries.
The EU had sought an entry fee of up to €6.5 billion for London to access the aid benefits provided by Safe.
Thomas-Symonds said negotiations were conducted in good faith but stressed that the UK would only enter agreements that align with its national interest and represent good value.
The European Commission also highlighted that without a deal, the UK can still participate in up to 35% of projects, albeit without access to Safe loans available to EU members.
Under Safe rules, participating countries must ensure at least 65% of weapon components are manufactured within the EU.
The programme aims to offer highly favourable loan terms by next year to EU member states and select other countries, including Ukraine.
Negotiations with other countries like Canada are ongoing, with the Commission aiming to secure an agreement with Ottawa before Sunday.
