By Alistair Smout and Andrew Gray
LONDON/BRUSSELS (Reuters) – Britain said on Friday that talks to join the European Union’s SAFE defense fund had failed, in a blow to a much-lauded reset of post-Brexit relations aimed at strengthening Europe’s defence.
Prime Minister Keir Starmer hailed a “new era” in Britain’s relationship with the EU in May, with a deal to restart defense and trade ties allowing London to negotiate to join the 150 billion euro ($173 billion) fund to rearm Europe.
But two days before the deadline to conclude the talks, Great Britain said it would not be possible to reach an agreement.
“While it is disappointing that we have not been able to conclude discussions on the participation of the United Kingdom in the first round of SAFE, the defense industry of the United Kingdom will still be able to participate in projects through SAFE on the terms of third countries,” said Nick Thomas-Symonds, the British Minister for European Union Relations.
“The negotiations were carried out in good faith, but our position has always been clear: we will only sign agreements that are in the national interest and provide value for money.”
‘FRUSTRATING’ RESPONSE TO EUROPEAN DEFENSE PROCUREMENT
Shares in Britain’s biggest listed defense companies – BAE Systems, Rolls-Royce and Babcock – were not affected by the news.
According to the terms of the fund, procurement contracts must ensure that no more than 35% of component costs originate outside the EU or from other participating countries such as Ukraine.
Aerospace and defense industry group ADS expressed disappointment, saying the limited level of participation “does not represent the scale of the potential presented by SAFE”.
“This missed opportunity for the UK’s defense and security supply chain is a frustrating blow following the successful reset of UK-EU relations in May 2025, especially at a time when stability and investment in European defense is most needed,” said Kevin Craven, CEO of ADS.
Negotiators had discussed whether British participation could instead be limited to 50% but Britain backed down on EU demands to contribute billions of euros to access.
Starmer sought to contrast the often rancorous relationship between previous Conservative governments and the EU as they negotiated Britain’s departure from the bloc, which was completed in 2020. He also took a leading role in coordinating European support for Ukraine.
A spokesman for the EU Commission declined to comment on the outcome of the talks, saying that they were intense but were carried out in a constructive manner and in good faith.