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Britain is to hold new talks with Brussels about joining a multibillion-euro EU defence fund, as both sides seek to deepen military and economic co-operation after this week’s near-breakdown of transatlantic relations with the US.
British ministers will hold talks with their EU counterparts in London on February 2, with an aim to make speedy progress on a range of areas ahead of a summit between the two sides, provisionally slated for May.
Officials in London and Brussels told the FT that talks about Britain joining a future round of the Security Action for Europe fund would be discussed, as national capitals seek to boost defence spending.
A UK bid to join the original €140bn Safe fund broke down in November after Britain refused to pay billions of euros in fees, but there are hopes that the rift can be repaired.
“We are open to discussions about taking part in any second round of loans,” a UK official said. Another official added: “It would obviously need the EU to change its position. We were talking about a fee of hundreds of millions — they wanted billions.”
However Britain’s exclusion from the fund caused concern across Europe, with countries including Germany and Italy saying it would send the wrong message to Russia as it continued to wage war in Ukraine.
Donald Trump’s military threats towards Greenland and his disparaging of the Nato alliance have given an added urgency to talks on how to integrate Britain — a big hitter in European defence — into EU programmes.
“If the past days have made anything clear, it’s that we have to keep our friends close,” said an EU diplomat, adding: “There should be a fair financial contribution.”
France was among the countries demanding a high entry fee for Britain joining Safe last year, with the FT reporting that Brussels had put a €2bn price tag on the UK taking part in the loan guarantee scheme.
EU officials said they had not given up hope that Britain could join Safe and that defence co-operation would be part of the discussions next month.
Andrius Kubilius, EU defence commissioner, told the FT last month that there were “sounds in the corridors” about moving to a second round of Safe loans. “Appetite is high,” he said.
But officials in Brussels have warned that the EU’s decision to raise €90bn of borrowing against the bloc’s shared budget to fund military and budgetary support for Ukraine has used up funding that could have been used for “Safe II”.
A commission spokesperson said it was currently assessing the first round of Safe national plans from member states. “We will not speculate on a possible second Safe fund at this stage”.
Safe is designed to boost European defence spending and allow countries to jointly procure new weapons by borrowing money guaranteed by the EU budget.
EU countries can spend up to 35 per cent of the rearmament fund with UK defence companies thanks to a bilateral security partnership signed last May. That could rise to 50 per cent if Britain joined Safe and British businesses could take the lead on contracts.
No firm date for an EU/UK summit has been set, but Brussels officials said that Sir Keir Starmer, British prime minister, was pushing for May as he seeks to prove that his European “reset” is paying dividends.
Britain and the EU want to finalise discussions on a deal to cut border friction on food exports at the summit, along with a new youth mobility scheme and progress on integrating energy markets.
Maroš Šefčovič, EU commissioner overseeing talks with the UK, told the FT: “There’s an interest on both sides to proceed quickly.”
Starmer is facing fierce pressure from inside his Labour Party — including from potential leadership rivals — to go further and faster on rebuilding EU ties such as forging a new post-Brexit customs union.
Wes Streeting, health secretary, has talked about the advantages of a customs union, while Andy Burnham, Greater Manchester’s 56-year-old mayor, has said he wants to rejoin the EU “in my lifetime”.
Paul Novak, head of the Trades Union Congress, wrote on the LabourList website: “In an increasingly volatile and unpredictable global economy, forging closer ties with our closest neighbours is a no-brainer.”
“That means being ambitious in our reset with the EU and exploring commonsense options.”
UK ministers have set a target for a veterinary agreement to be in place by mid-2027, with legislation on the UK statute book by the end of this year to enable the UK to “dynamically align” with EU food and drink regulations.
Both EU officials and industry insiders have told the FT that detailed negotiations on the veterinary agreement are still at an early stage and described the UK timetable for a deal as “highly ambitious”.
The UK government has said it wants to close a deal on relinking carbon-trading schemes by December, before the UK introduces carbon border taxes in 2027.
The most contentious issue remains a ‘Youth Experience Scheme’ to enable 18-30-year-olds to live, work and study in the EU and UK for 2-4 years.
Draft texts of the Youth Experience Scheme submitted by both the UK and EU in December, seen by the FT, show that both sides remain far apart both on the extent of the scheme and its legal basis.