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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n Britain will have to pay the EU a percentage of the value of any weapons bought from UK companies via a Brussels-led defence fund, under plans being drawn up by the bloc to counter the growing threat from Russia. <\/p>\n Prime Minister Sir Keir Starmer in May said the UK would join the EU\u2019s new \u20ac150bn Security Action for Europe (Safe) project to boost military spending across the continent, as part of a \u201creset\u201d of bilateral relations.<\/p>\n Participating in Safe would provide \u201cnew opportunities for our defence industry, supporting British jobs and livelihoods\u201d, Starmer said. <\/p>\n But London will be required to recompense Brussels for being allowed to take part in the EU-backed scheme aimed at procuring drones, missile defence systems and other capabilities, two EU diplomats told the Financial Times.<\/p>\n \u201cWhat was written in the Safe regulation is that there shall be a fair balance as regards the contributions and the benefits\u201d of outside countries such as the UK, said one of the diplomats. <\/p>\n The Safe fund is part of an effort by the bloc to mobilise \u20ac800bn in new defence spending by 2030, in the face of a growing threat from Russia and calls by US President Donald Trump for Europe to pay for more of its own security.<\/p>\n Launched in May, its loans will allow member states and designated \u201cthird countries\u201d, such as the UK, to engage in joint procurement.\u00a0<\/p>\n The scheme is designed to leverage the EU\u2019s credit strength to increase overall defence spending while better unifying Europe\u2019s armed forces, which are saddled by inefficient and duplicative procurement processes.\u00a0<\/p>\n The exact figure that Britain will have to pay to access the fund is still under discussion by member states as they finalise their position on the deal with the UK, which is expected to be published this week.<\/p>\n But the diplomats said that since British businesses would receive EU money to create jobs and expand capacity under the scheme, London should recompense Brussels. <\/p>\n If UK companies won contracts funded by Safe money, the UK government must pay a percentage into the fund to help balance out the economic benefit of the contracts, the diplomat added.<\/p>\n The same mechanism would apply to Canada and any other countries that want their industry to access the money, they noted.\u00a0<\/p>\n In order for UK defence products to qualify, the value of their components from members of Safe must be at least 65 per cent. Members include the EU, Ukraine, Iceland, Liechtenstein, Norway, Switzerland and any third countries that join.\u00a0<\/p>\n Senior UK officials said France was driving a hard bargain in talks with other member states to agree an EU negotiating mandate this week. One described the situation as \u201ctricky\u201d.\u00a0<\/p>\n Mujtaba Rahman, managing director for Europe at the Eurasia Group consultancy, said both London and Brussels needed to keep the big picture in mind.<\/p>\n \u201cIt is really important that both sides don\u2019t allow parochial national interests to get in the way of the bigger prize, which is strengthening collective European defence in light of the threat posed by Putin\u2019s Russia,\u201d he said.<\/p>\n France, which views Safe as a way to expand the EU arms industry, is pushing for a high UK contribution. But other countries, led by Germany, want to ensure the UK is not dissuaded from joining,\u00a0a third diplomat said.<\/p>\n Under the EU\u2019s terms, countries must bid for the loans by July 29, with a maximum pot of \u20ac150bn. They would then join another Safe member to buy weapons, aiming to lower prices by pooling demand. The UK would have to use national money to join such projects.<\/p>\n Third countries \u2014 other than those included by default, such as Ukraine \u2014 must first sign a security and defence partnership with the EU, and then a specific agreement to join Safe.<\/p>\n Recommended<\/p>\n Britain signed the first of these at the reset summit in London in May, and will negotiate the second once the EU has agreed its mandate.<\/p>\n Time is tight because projects must be submitted by the end of November, with the European Commission, the EU\u2019s executive, deciding which to approve.\u00a0<\/p>\n Thomas Regnier, commission defence spokesperson, said the EU-UK accord in May meant UK-based entities could provide up to 35 per cent of the value of a defence product procured through Safe. <\/p>\n To obtain a bigger share would require \u201can agreement with the EU on the precise modalities on aspects such as budget contribution and security of supply\u201d, he added.\u00a0<\/p>\n The UK cabinet office said it would not pre-empt future discussions with the EU. <\/p>\n \u201cIt is in all our interests for the UK and EU to bring together our unique capabilities and expertise to make Europe a safer, more secure, and more prosperous place,\u201d it added.<\/p>\n","protected":false},"excerpt":{"rendered":" Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Britain will have to pay the EU a percentage of the value of any weapons bought from UK companies via a Brussels-led defence fund, under plans being drawn up by the bloc to counter the<\/p>\n","protected":false},"author":1,"featured_media":11597,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[5025,327,1051,3295,1040],"class_list":{"0":"post-11596","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-150bn","9":"tag-defence","10":"tag-fund","11":"tag-join","12":"tag-pay"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/11596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11596"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/11596\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/11597"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}