As part of a new partnership with the European Union (EU) to determine post-Brexit commitments in a range of sectors, including defence, the UK government confirmed that the new deal “will pave the way” for Britain’s defence industry to participate in the EU’s €150bn (£126bn) defence fund.
Known as Security Action for Europe (SAFE), the EU policy is an emergency financial instrument that offers up to €150bn ($169bn) to member states and participants in the form of loans.
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SAFE constitutes just one pillar within the EU’s ReArm Plan that enables defence spending of up to €800bn to increase Europe’s defence market competitiveness and promote cheaper, collective procurement.
What are the details of the UK-EU defence partnership?
British Prime Minister Keir Starmer, alongside the President of the European Commission Ursula Von der Leyen, and the President of the European Council Antonio Costa, announced details of the UK-EU deal in a summit in London today (19 May), which the BBC televised.
Von der Leyen laid out the limited details of the defence and security partnership, which she said “opens the door towards joint procurement” alongside EU member states. She stated that Britain’s path towards SAFE will “increase readiness” and “close military gaps.”
In the same spirit, the UK Foreign and Defence Secretaries, David Lammy and John Healey, agreed to foreign and security dialogues with the EU High Representative Kaja Kallas every six months.
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By GlobalDataLikewise, the wider security deal will also ensure “stronger coordinated support for Ukraine, either through joint procurement… or through direct investment in Ukraine’s defence industry.”
Crucially, however, it should be understood that the UK is not yet permitted to derive funds from SAFE, but the nation is expected to be able to do so soon. While the SAFE regulation is up and running now, it was only recently established to support member states. More details of Britain’s accession timeline and roadmap have still yet to be determined; it is hoped that these additional negotiations will only “take a few weeks,” Von der Leyen continued.
Just hours after the initial announcement, Healey mentioned the new UK-EU partnership in passing during parliamentary questioning without offering any further details on the next steps to these prospective defence and financial ties with the EU.
Ed Arnold, senior research fellow for European Security at the London-based Royal United Services Institute, intimated that there are “no tangible deliverables or milestones, instead relying on vague commitments to talk more.”
Nevertheless, Starmer asserted that “Britain is back on the world stage”. UK-EU defence cooperation will offer “new opportunities for [the UK’s] defence industry,” he reiterated alongside EU leaders.
SAFE: UK defence trade may eventually grow beyond 35% limit
The financial assistance under SAFE enables participants to carry out urgent and major public investments in the European defence industrial base, promote common procurement, and ensure a rapid increase of defence production capacity.
Priority areas include air and missile defence, artillery systems, missiles and ammunition, drones and counter-drone systems, strategic enablers and critical infrastructure protection, including in relation to space, cyber, artificial intelligence and electronic warfare, and military mobility.
At present, a minimum of 65% of components of a defence product that will be jointly procured under SAFE must be sourced from within the EU’s defence industrial base.
This means, at present, the UK can only provide up to 35% of components to defence systems jointly procured from among European countries. Worse still, this share is split among other countries outside of the EU, such as the US.
Now, with a pathway to participating in the SAFE regulation, the UK will be able to bypass this supply chain limitation. If ever agreed upon, this would allow EU countries to purchase up to 65% of a product from the UK, or even 100% of a British-made defence product.
