EU Hits UK with Price Tag in Shocking Defence Deal Twist – British Firms Must ‘Pay to Play’

The European Union has told the UK that if British defence companies want to take part in a major new EU fund meant to boost military production, they’ll have to pay for the opportunity.

Even though a new defence and security partnership between the UK and EU is expected to be announced soon, British firms won’t automatically get access to the fund. This was reported by The Times.

A European official explained that UK arms companies will need to “pay to play” if they want to win contracts under this fund. The diplomat also noted that while some EU countries are open to UK involvement, others particularly France are against it. This is likely to be a setback for UK Labour leader Sir Keir Starmer, who is trying to rebuild strong ties with the EU after Brexit.

Later this month, there will be a UK-EU summit in London where this issue may be discussed. Back in March, the European Commission revealed a plan to provide up to €150 billion (around £128 billion) in loans to EU countries to increase military spending. This is part of a wider effort to strengthen Europe’s defences because of growing fears over Russia and uncertainty about America’s long-term commitment to Europe’s security.

European Commission President Ursula von der Leyen said we’re now living in dangerous times and Europe is entering a period where military spending will rise significantly.

Currently, only EU member states and a few others like Switzerland and Ukraine can automatically benefit from the new defence fund, known as the Security Action for Europe (SAFE) fund. Countries like the UK are excluded unless they agree to a special defence agreement with the EU.

Although the UK is working on a new partnership with Brussels, French pressure reportedly led to the decision not to give Britain automatic access to the fund. Instead, British involvement will depend on a separate agreement, which will likely include financial contributions from the UK. It might take months to settle the details, and even then, only certain UK-made weapons or equipment may be accepted.

Major UK defence companies like BAE Systems and Babcock have been pushing to be included in the fund. Meanwhile, the UK is increasing its own weapons production to be less dependent on the US and France.

Defence Secretary John Healey said that the defence industry is vital because it underpins the UK’s ability to succeed in combat.