UK fails to secure deal for EU weapons loans programme

The EU and the UK were unable to reach an agreement allowing Britain to join the bloc’s €150 billion Security Action for Europe loans-for-weapons program, according to a Politico report, citing the European Commission and the UK on Friday.

“We, of course, remain fully committed to delivering our ambitious UK- EU security and defense partnership,” Politico quoted Commission spokesperson Thomas Regnier as saying.

“If an agreement could not be found at this point in time, let’s not forget that SAFE is open by design,” Regnier added

A spokesperson for UK Prime Minister Keir Starmer told Politico, “This is one of our most important alliances … we will move forward with all our defence plans regardless of our participation in SAFE.”

Under SAFE, third countries can cover up to 35% of a weapons system’s value. The UK had sought a higher share to benefit its arms industry.

Negotiations with the EU were fraught, centering on how much London should contribute to joint procurements. The UK offered only millions of euros, while the EU reduced its initial demand of €4.5–6.5 billion to €2 billion.

A UK official told Politico thatLondon aimed for a “clear, rigorous methodology” but faced “too big a gap” with the Commission’s expectations. Even without a deal, the UK can still participate under the 35% threshold.

“We’re still bullish about prospects for the UK exports industry — we’re firmly in the in the place of wanting to work with our European allies. It’s bigger than this one scheme,” the same UK official said

The head of the Commission’s Directorate-General for Defence Industry and Space, Timo Pesonen, told EU ambassadors on Friday morning that there is no deal with the UK, a diplomat told Politico.

The Commission is also negotiating a similar agreement with Canada.

Pesonen said he will provide an update on those talks Friday afternoon, noting there is more optimism that a deal can be reached with Ottawa.

“We were showing openness; we’re offering different solutions, but maybe the Brits changed a little bit their mind as … member states can buy from them directly,” Politico quoted EU Defence Commissioner Andrius Kubilius as saying.

London and Brussels have been negotiating for weeks ahead of a Sunday deadline, when the 19 member states taking low-interest SAFE loans will present the Commission with their defense spending plans.

Officials did not rule out resuming talks later, but Kubilius said: “For the time being at least, I don’t have any kind of indication that [talks] can continue … it’s over.”

He declined to comment on the financial dispute but stressed, “We see this partnership with Britain as very important.” He added he hopes to announce a deal with Canada by Sunday, as “we’re quite close.”

In a statement, UK Minister for European Union Relations Nick Thomas-Symonds said, “while it is disappointing that we have not been able to conclude discussions on UK participation in the first round of SAFE, the U.K. defence industry will still be able to participate in projects through SAFE on third country terms.”

He also stressed that “negotiations were carried out in good faith, but our position was always clear: we will only sign agreements that are in the national interest and provide value for money.”

With inputs from agencies