Diplomacy

US, Britain, and Türkiye excluded from EU armament fund

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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.

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