UK on the verge of quitting EU’s rearmament plan over French demands | UK | News
Ministers have warned the European Union that Britain will abandon the bloc’s rearmament program after rejecting French demands to pay more than £5bn for participation. The move follows months of negotiations between British officials and Brussels to join a €150bn (£132bn) loan scheme designed to finance arms purchases by European states to counter the threat of Russian aggression.
Sir Keir Starmer expressed his support for the UK’s participation in the Security Action for Europe (Secure) program in the summer, stating that this would provide opportunities for the UK’s defense industry and support the jobs and livelihoods of British people. But the plans were derailed after the French asked British taxpayers to contribute €6.5bn (£5.7bn) to EU budgets to allow British defense firms to bid for a limited number of contracts under the scheme, The Times reported.
The British side’s rejection of France’s demands and offer of “less than £1 billion” for participation led to a deadlock in the negotiations. Starmer is understood to have raised the issue with European Commission president Ursula von der Leyen last week, but the issue remains unresolved.
Pessimism grows about reaching a deal as deadline approaches
As the deadline for an agreement approaches the end of the month, pessimism that an agreement can be reached is increasing. A senior UK source said: “The terms offered are unacceptable and the French refuse to make concessions. As things stand, we will withdraw.”
The source added that leaving might not be a bad thing because it would make clear that the UK will only agree to terms that are in its own national interests and paying over £5bn to the EU is clearly not the case.
A UK official said Britain still wanted to join the programme, but the terms had to be “reasonable and fair”. The official acknowledged that current terms are neither reasonable nor fair, but Britain remains at the negotiating table.
Macron’s stance on high financial contributions from the UK
French President Macron has stipulated high financial contributions from Britain for British arms companies’ participation in the Secure programme, which relies on EU loans guaranteed by the Brussels budget and attracts lower interest rates than many European governments can secure in the markets.
Low borrowing rates appear attractive for Britain, which is facing financial distress. But France, which also faces market pressure, argues that Britain is not entitled to aid after leaving the EU unless taxpayers “pay to play”.
A French diplomatic source dismissed British complaints, saying: “Brits are indeed free to make their own choices and no one is forcing them to use Safe. [on the loans] “It’s perfect, thanks to the internal market that Britain wanted to leave.”
