UK-EU Defence Fund Talks Collapse: A Setback for Post-Brexit Security Cooperation & €150bn SAFE Initiative

UK-EU Defence Fund Talks Collapse, Hitting Post-Brexit Security Hopes

Efforts to integrate Britain into the European Union's ambitious SAFE defence fund have definitively faltered, marking a significant blow to hopes for a renewed post-Brexit security partnership. Despite Prime Minister Keir Starmer earlier hailing a "new era" of cooperation in May, which included an agreement for the UK to negotiate joining the €150 billion ($173 billion) initiative designed to rearm Europe, discussions have now broken down.

Negotiations Conclude Without Agreement

Just two days before the negotiation deadline, London confirmed that an agreement would not be reached. Nick Thomas-Symonds, Britain's Minister for European Union Relations, expressed disappointment but emphasized that the UK defence industry could still participate in SAFE projects under 'third country terms.' He reiterated Britain's steadfast commitment to signing only agreements that serve the national interest and offer demonstrable value for money, asserting that negotiations were conducted in good faith.

Procurement Rules a Stumbling Block

The core stumbling block appears to be the fund's stringent procurement rules. These regulations dictate that no more than 35% of component costs for projects can originate from outside the EU or other participating nations like Ukraine. This threshold likely presented a significant challenge for full UK integration into the fund's core framework.

The news, announced on Friday, November 28, 2025, has reportedly not impacted the share prices of major British defence firms such as BAE Systems, Rolls-Royce, and Babcock.

EU Leaves Door Open for Limited Participation

An EU Commission spokesperson, while declining to comment on the specific outcome of the 'intense' and 'constructively' held discussions, noted that SAFE's design is inherently open. The spokesperson confirmed that Britain could still contribute up to the 35% limit for third-country involvement, underscoring the EU's continued commitment to fostering a strong UK-EU security and defence partnership.