France’s attempt to exclude the UK from the EU’s defense fund has backfired on Paris, depriving it of accessible European loans that the government had planned to spend on Franco-British arms projects.
“Elchi” reports that the Financial Times (FT) wrote about this, citing three sources.
“France requested 16.2 billion euros from the EU defense fund, but the European Commission approved only 15.1 billion euros because projects involving Britain did not meet the criteria that the French themselves insisted on,” the article noted.
Last spring, Brussels agreed on a 150 billion euro SAFE lending mechanism to increase joint defense procurement.
“Among the projects excluded from the selection are those of the missile manufacturer MBDA (which is jointly owned by Airbus, Britain’s BAE Systems, and Italy’s Leonardo),” one of the interlocutors clarified. MBDA’s British and French divisions produce the long-range Storm Shadow/Scalp missiles used by Ukraine.
France demanded that 65% of the value of products funded by the fund must come from the EU single market (including Norway and Iceland) or Ukraine. If they have not signed a security and defense partnership agreement with the bloc and agreed to fund the program, contractors from other countries can only account for 35% of the value. To date, only Canada meets these two conditions.
Last year, London signed a defense agreement with Brussels, but negotiations on the payment amount broke down after Paris insisted that the European Commission demand more than 6 billion euros from the British. Although this amount was later reduced to 2 billion euros, the parties could not reach an agreement.
A senior EU diplomat noted that the rejected Franco-British project demonstrates the need to “build bridges” between “leaders’ ambitions” and what is happening at a “practical level.”