UK exclusion from EU defense loan ‘self-defeating’

LONDON — British Defence Minister Al Carns described the failure to agree U.K. entry into the EU’s SAFE program as “self-defeating” for European security.

Speaking at a Chatham House event, Carns said the U.K. `is “absolutely essential to European security… so to not allow it into a European defense fund is actually self-defeating if we’re talking about a threat potentially materializing.”

Talks between Brussels and London on the bloc’s €150 billion Security Action for Europe loans-for-weapons plan collapsed in November after the two sides hit an impasse over Britain’s entry fee.

Without an agreement, the U.K. can still take part in joint procurement projects in which a maximum of 35 percent of the value of a weapons system is paid for by the scheme.

The U.K. had been negotiating for a higher percentage, which would benefit the country’s large arms industry.

The armed forces minister predicted: “You’re going to see more work on that. I think you’re going to see far greater collaborations.”

Keir Starmer talked up his desire for deeper EU-U.K. collaboration on defense financing at the Munich Security Conference, as did Chancellor Rachel Reeves in a recent speech.

However, it is not yet clear what form this will take. The Commission has not so far indicated it is moving towards a second round of the SAFE initiative, while the U.K. Treasury remains downbeat about the prospect of joining a global defense bank.

London is currently lobbying Brussels over new EU procurement rules which could impact British manufacturers, although it is not yet known if the “Made in Europe” plan will include the defense sector.

Caroline Hug contributed reporting.