UK barred from new Brussels defence fund
NON-EU arms companies have to satisfy set of ‘strict conditions’ to qualify for European security projects
THE European Union is to close the door on British and non-eu defence companies participating in a €500million defence fund after Brexit, The Daily Telegraph can disclose.
The EU’S block, which follows a dispute over the exclusion of British firms from the €10 billion Galileo satellite navigation system on security grounds, has raised further fears about Brussels’ willingness to forge a security partnership with the UK after Brexit.
Sources in Brussels said the European Commission had agreed to impose “strict conditions” on non-eu companies that wanted to participate in projects financed by the EU fund which is set up next year.
British sources fear the hurdles are so high that the country’s defence industry risks being shut out of EU defence procurement, except for major hi-tech projects that require elite British know-how. Barriers facing UK companies would include controls on access to sensitive information, signing over intellectual property rights to the EU and the requirement for foreign companies to have subsidiaries and management based inside the bloc.
Senior Whitehall defence sources said the EU’S ultra-defensive approach matched the pattern of the legalistic approach to Galileo and risked damaging Europe’s long-term security.
“The Commission is dangerously obsessed with this idea of strategic autonomy and that Britain must ‘pay a price’ for Brexit,” the UK source added, “but the danger is that they are just pushing us away into the arms of the Americans.”
Last week Brexit talks descended into acrimony after Britain threatened to demand the EU repay £1billion of investment in Galileo, with EU diplomats retorting that Britain was in “fantasy land” and warning that it would “not negotiate under threat”.
The toughened rules for the new European Defence Industrial Development Programme (EDIDP) were provisionally agreed at a meeting in Brussels last week and are expected to be ratified by EU ambassadors next
Tuesday.
The fund is part of the EU’S attempt to boost defence spending. It will start small with a €500 million (£437 million) budget for 2019-20, but UK defence specialists believe it could grow into a multi-billion-euro fund second only to the development budgets of France and the UK.
British diplomats had argued in vain in Brussels that Europe was being dangerously short-sighted in driving out the UK, which accounts for about 40 per cent of the European defence industry. A senior diplomat said: “The defence of Europe is too serious and our collective defence industries are not big enough to be fragmented.”
EU diplomats dismissed British concerns, arguing the aim of the EU fund was precisely to boost European capabilities and strategic autonomy at a time America’s backstop for Europe’s defence could no longer be taken for granted.
EU governments wanting non-eu companies for defence projects would have to assure the European Commission that they did not risk EU interests and security.