US, UK, and Turkish arms companies will be excluded from the EU’s new €150 billion defense fund unless their countries sign defense and security agreements with Brussels.

According to the Financial Times (FT), officials stated on Wednesday that the planned fund for arms spending would only be open to EU defense companies and those from third countries that have defense agreements with the bloc.

Officials added that advanced weapons systems where a third country has “design authority” (restrictions on construction or the use of specific components) or controls the end-use would also be excluded from the fund.

This would exclude the US Patriot air and missile defense platform, manufactured by defense company RTX, and other US weapons systems where Washington has restrictions on where they can be used.

This policy is seen as a victory for France and other countries that have called for a “Buy European” approach to the continent’s defense investments, amid fears caused by President Donald Trump regarding the long-term reliability of the US as a defense partner and supplier.

At least 65% of the products’ costs must be spent in the EU, Norway, and Ukraine. EU member states will not be able to spend this money on products “where the use or destination of the weapon can be controlled.”

One official said that it would be a real problem if equipment purchased by countries could not be used because a third country objected.

The UK has lobbied extensively to be involved in this initiative, particularly given its key role in the European “coalition of the willing,” which aims to strengthen the continent’s defense capabilities.

UK defense companies such as BAE Systems and Babcock International are deeply integrated into the defense industries of EU countries like Italy and Sweden.

Officials stated that if third countries like the US, Britain, and Türkiye want to participate in this initiative, they must sign a defense and security partnership with the EU.

Negotiations for such an agreement between London and Brussels have begun but have been stalled by demands for a larger EU-UK agreement that includes contentious issues such as fishing rights and immigration.

Excluding Britain and Türkiye could create significant distress for major European defense companies with close ties to manufacturers or suppliers in these markets.

When asked about his country’s position on the new EU fund rules on Tuesday, a British official said, “We stand ready to work together on European defense in the interests of wider European security, to avoid fragmentation in European defense markets, and to create legal structures that allow member states to partner with third countries.”

A senior UK defense sector official said this was a “significant concern,” adding, “We see a huge amount of opportunity, and it is right that the UK is seen as part of Europe. But if the EU and particularly France are going to play this with a transactional approach, it undermines a common and united European philosophy in terms of defense and security.”

France’s previous efforts to limit defense spending to only EU companies faced strong resistance from countries such as Germany, Italy, Sweden, and the Netherlands, which have close ties with defense manufacturers outside the EU.

The proposal needs to be approved by a majority of EU countries. Officials said that under the plan’s terms, EU countries can spend the funds on products using components from Norway, South Korea, Japan, Albania, Moldova, North Macedonia, and Ukraine.

The detention of Istanbul Metropolitan Municipality Mayor Ekrem İmamoğlu early this morning, amid allegations of “supporting terrorism through a city consensus” and “corruption,” continues to resonate globally.

In Western media, İmamoğlu’s detention is largely viewed as a move ahead of potential presidential elections and against President Recep Tayyip Erdoğan’s most significant rival.

For example, the Financial Times, in its article titled “Turkish police detain Erdoğan’s main political rival,” stated, “State media said İmamoğlu’s detention on Wednesday was part of an investigation into alleged terror links, while the opposition called the move a ‘coup attempt,’ and the arrest sent the Turkish currency and markets tumbling.”

Investment management firm T Rowe Price analyst Tomasz Wieladek told the FT that the detention was “a wake-up call for everyone.”

Wieladek suggested that the Turkish Central Bank has “limited firepower” to defend the lira, adding, “Assets will probably continue to be sold off further.”

Bloomberg reported that Turkish banks sold $8 billion to support the lira from morning to midday.

Highlighting the market turmoil since morning, Bloomberg noted in another report, “Turkish markets were rattled on Wednesday after the detention of a top rival to President Recep Tayyip Erdoğan, stoking concern that political turmoil risks undermining recent investor-friendly economic policies.”

Nick Rees, macro research director at Monex Europe in London, was quoted in the report, saying, “This has been a bit of a shock to the system. Markets had become increasingly complacent, and now that spell has been broken, dramatic consequences are unfolding as traders reprice Türkiye’s political risk premiums.”

Henrik Gullberg from Coex Partners said the magnitude of the move was “surprising,” but news of political pressure was less so, adding, “Practically, I’m not sure this changes much in terms of market-sensitive economic policies.”

The report also noted that the Borsa Istanbul 100 Index fell by approximately 7% at the opening, while the yield on 10-year government bonds increased by 139 basis points to 29.58%.

Germany’s Der Spiegel, in its article titled “Turkish authorities arrest Erdoğan’s most important opponent,” stated, “Turkish authorities are expanding their repressive measures against Istanbul Mayor Ekrem İmamoğlu.”

The report highlights that İmamoğlu, along with Ankara Metropolitan Municipality Mayor Mansur Yavaş, is seen as Erdoğan’s strongest rival.

According to DW Turkish, İmamoğlu’s detention also resonated widely in German politics. The development was assessed as an “attempt by Erdoğan to disable his main rival” and warned that it could have serious consequences.

SPD Co-Chairman Lars Klingbeil harshly criticized İmamoğlu’s detention as a “severe attack on democracy in Türkiye.”

Klingbeil stated, “The Turkish government is thus showing that it no longer wants fair elections and an independent rule of law. The steps taken are disproportionate and destroy trust and credibility. This will have dramatic consequences for the entire country.”

Max Lucks, a member of the German Federal Parliament’s Foreign Affairs Committee and Chairman of the German-Turkish Parliamentary Group, also described İmamoğlu’s detention as an attack on fair elections and fair competition in light of the presidential elections.

The British The Times, in its article titled “Istanbul Mayor arrested as Erdoğan cracks down on election rivals,” stated, “Protests have been banned across the city after the arrest of Ekrem İmamoğlu, seen as the Turkish leader’s biggest threat for the presidency.”

A report in Tokyo-based Nikkei Asia also claimed that Turkish authorities had detained “Erdoğan’s main rival,” noting that the opposition described the move as a “coup.”

Bloomberg, citing individuals with direct knowledge of the matter, reported that Turkish credit institutions sold approximately $8 billion by noon on Wednesday to support the lira after the currency fell by around 11% following the detention of Istanbul Mayor Ekrem Imamoglu.

The individuals, who requested anonymity due to the sensitivity of the matter, stated that the intervention in the lira market was carried out through multiple credit institutions.

Bloomberg could not obtain comment from the Central Bank.

As of 12:45 PM, the lira was trading at 38.8565 per dollar, down 5.5%.

Following market turmoil, Finance Minister Mehmet Simsek tweeted, “Everything necessary is being done to ensure the healthy functioning of the markets. The economic program we are implementing continues with determination.”