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France has put forward a plan to restrict the use of British-made defense components in the European Union's €150 billion defence fund, a step that could complicate negotiations over Britain’s participation in the initiative.

Suggested Fifty Percent Cap on UK Content

Per diplomatic sources, French representatives has suggested a 50% ceiling on the value of British parts in projects funded through the European Union’s SAFE fund.

This €150bn loans scheme is part of the bloc’s broader push to increase defence expenditure and strengthen European defense resources.

UK-EU Defense Partnership

In May, British leader the UK’s premier and EU chief Ursula von der Leyen signed a significant defense and security agreement, enabling increased British participation in European military initiatives.

Without this pact, the Britain would have been limited to providing no more than 35% of the value of components in any program-supported project.

Ongoing Negotiations and Potential Hurdles

Yet, the UK still needs to negotiate a technical agreement to secure a more significant role for its military industry, and the EU could impose further limits on UK participation.

In addition, the British government needs to agree on a fee to participate in the scheme.

Such proposed restrictions on UK contributions were discussed during private meetings as EU member states prepare a bargaining position for the EU executive before negotiations with the British government.

Member State Responses

A vast majority of member states reportedly oppose limits on UK participation, preferring flexibility in defence procurement.

An European official described the suggested 50% limit as a “classic French obsession.”

France has consistently advocated for a European military sector that is autonomous from the United States, and has contended that post-Brexit, the UK should not gain from the EU’s internal market privileges.

British Aims and Benefits

The British government does not intend to request funding from the scheme—which are reserved for EU member states—but aims that UK defence companies will profit from the spending bonanza.

A formal deal to enter SAFE would make it easier for UK firms to participate in military production networks, providing gear ranging from unmanned aerial vehicles and ammunition to sophisticated artillery systems with deep strike capabilities.

Formal Comments

“We support the European Commission in its efforts to establish the parameters for the Britain’s association with the program. Foundation for this is provided by the SAFE regulation, which state that a portion of components must originate in the EU’s industry.”

— Spokesperson, France’s Diplomatic Mission

“The UK is an essential partner for the EU. Have many shared goals, hence our will to sign a mutually beneficial agreement to fully associate them with our defence program.”

— Thomas Regnier, European Commission

Future Proceedings

The UK must also negotiate a membership cost to join the scheme, which is intended to cover administrative expenses.

European diplomats are set to discuss UK accession to SAFE this coming days, along with a parallel proposal for Canada, which lately signed its own security pact with the bloc.

Latest Involved Nations

EU authorities announced that nineteen member states will receive program loans.

• Poland is taking the biggest loan of €43.7bn.
• The French state and the Hungarian administration will each obtain €16.2bn.
• Romania is set to receive €16.7bn.
• Italy will secure €14.9 billion.

The EU-backed loans reduce interest rates for many countries and can be allocated for supplying national armies or aiding Ukraine.