EU-UK talks on defense deal break down

BRUSSELS — The EU and the U.K. failed to reach a deal on allowing Britain to take part in the bloc’s €150 billion Security Action for Europe loans-for-weapons program, three diplomats told POLITICO today.

The negotiations have been very difficult, with London and Brussels clashing on how much the U.K. would have to pay to take part in joint procurements financed by SAFE. The U.K was offering only millions of euros, while the EU slashed its initial request for London to pay between €4.5 billion and €6.5 billion to a lower €2 billion.

Head of the Commission’s Directorate-General for Defence Industry and Space, Timo Pesonen, told EU ambassadors this morning that there’s no deal with the U.K., one of the diplomats said.

The Commission is also negotiating a similar agreement with Canada. Pesonen said he will inform about the state of play of those talks this afternoon, but that there is more optimist that a deal can be reached with Ottawa.