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Britain to Pay EU for Access to Defence Fund Amid Plans for Boosted Military Spending

Strategic Insights

— 2 min read

Britain is set to join the EU's €150bn Security Action for Europe project to enhance military spending across the continent, as part of a "reset" of bilateral relations. However, London will have to compensate Brussels for participating in the scheme, which aims to procure drones, missile defence systems, and other capabilities. The exact figure that Britain will have to pay is under discussion as member states finalize their position on the deal with the UK.

Key Takeaways:

  • The EU's Security Action for Europe project aims to mobilize €800bn in defence spending by 2030, with Britain expected to contribute a percentage of the value of any weapons bought from UK companies via the Brussels-led defence fund.
  • Sir Keir Starmer said the UK would join the project to boost military spending and support British jobs and livelihoods, but London will be required to recompense Brussels for participating in the scheme.
  • The Safe fund is designed to leverage the EU's credit strength to increase overall defence spending and better unify Europe's armed forces, which are saddled with inefficient and duplicative procurement processes.
  • Mujtaba Rahman of the Eurasia Group consultancy emphasized the importance of not allowing parochial national interests to get in the way of strengthening collective European defence in light of the threat posed by Russia.
  • France is pushing for a high UK contribution to the fund, while other countries, led by Germany, want to ensure the UK is not dissuaded from joining.
  • Thomas Regnier, commission defence spokesperson, stated that the EU-UK accord in May meant UK-based entities could provide up to 35 per cent of the value of a defence product procured through Safe.

Statistics:

  • The EU's Security Action for Europe project aims to mobilize €800bn in defence spending by 2030.
  • The Safe fund has been activated to leverage the EU's credit strength to increase overall defence spending.
  • Up to 35 per cent of the value of a defence product procured through Safe can be provided by UK-based entities.

Sources:

  • Two EU diplomats told the Financial Times that the UK would have to pay a percentage of the value of any weapons bought from UK companies via the Brussels-led defence fund.
  • The Safe regulation stated that there shall be a fair balance as regards the contributions and the benefits of outside countries such as the UK (Financial Times).
  • Thomas Regnier, commission defence spokesperson, stated that the EU-UK accord in May meant UK-based entities could provide up to 35 per cent of the value of a defence product procured through Safe (Financial Times).
  • Mujtaba Rahman, managing director for Europe at the Eurasia Group consultancy, emphasized the importance of not allowing parochial national interests to get in the way of strengthening collective European defence in light of the threat posed by Russia (Financial Times).

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