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French officials have proposed an initiative to restrict the use of British-made military equipment in the EU’s €150bn defence program, a step that could hinder negotiations over the UK’s participation in the initiative.

Suggested 50% Cap on UK Input

According to officials, French representatives has proposed a fifty percent cap on the value of British parts in initiatives funded through the EU’s SAFE program.

This €150 billion loans scheme is part of the EU’s wider push to boost defence expenditure and reinforce European security resources.

UK-EU Defense Cooperation

Earlier this year, UK Prime Minister the UK’s premier and European Commission President the Commission’s head agreed to a landmark security and defence partnership, paving the way for increased British participation in EU defence projects.

Absent this pact, the UK would have been limited to providing no more than 35% of the value of parts in any SAFE-funded initiative.

Ongoing Talks and Possible Challenges

Yet, the UK must still finalize a detailed arrangement to obtain a larger part for its defence firms, and the EU may impose further limits on UK participation.

Moreover, the UK government needs to agree on a fee to participate in the program.

These proposed restrictions on UK inputs were discussed during private discussions as European countries draft a negotiating mandate for the EU executive before negotiations with the UK government.

Member State Reactions

The large majority of EU countries reportedly reject restrictions on UK involvement, favoring leeway in military acquisitions.

One European official described the proposed 50% cap as a “typical Paris fixation.”

Paris has consistently advocated for a European defence industry that is autonomous from the US, and has argued that since leaving the EU, the UK should not benefit from the EU’s internal market advantages.

British Aims and Advantages

The British government does not plan to request loans from the program—which are reserved for European countries—but aims that British defence companies will benefit from the spending bonanza.

A formal agreement to join SAFE would make it simpler for UK firms to participate in defence supply chains, supplying gear ranging from small drones and munitions to sophisticated artillery systems with deep strike abilities.

Official Comments

“Back the European Commission in its work to set the parameters for the UK’s participation with SAFE. Foundation for this is provided by the SAFE regulation, which state that a portion of parts must come from the EU’s industry.”

— Representative, France’s Permanent Representation

“The UK is an key ally for the EU. We share many shared interests, thus our desire to conclude a win-win agreement to fully associate them with our SAFE instrument.”

— Thomas Regnier, European Commission

Future Proceedings

Britain must also negotiate a membership cost to join the scheme, which is intended to cover administrative expenses.

European officials are set to discuss UK accession to SAFE this week, along with a parallel arrangement for the Canadian government, which lately signed its own defence pact with the bloc.

Current Participating Countries

The European Commission reported that nineteen member states will take out program funding.

• Poland is taking the biggest amount of €43.7 billion.
• France and Hungary will each obtain €16.2bn.
• The Romanian leadership is set to receive €16.7 billion.
• The Italian government will secure €14.9 billion.

The EU-supported funds reduce interest rates for many member states and can be used for supplying national armies or supporting Ukrainian defense efforts.