Commission given green light for talks on UK, Canada entry into SAFE defence loans scheme
But clear figures on the long-debated eligibility criteria were left out
EU ambassadors authorised the European Commission on Wednesday to start talks with London and Ottawa regarding the participation of Canadian and British arms makers in the bloc’s new SAFE defence loans programme, the Danish presidency said.
The UK and Canada will be the first non-EU countries to negotiate entry into the €150 billion scheme, which could pave the way for other countries eyeing entry. Talks will be held with each.
The ambassadors did not provide firm figures on the long-debated eligibility criteria, which will instead be set during the negotiations. Currently, third-country suppliers – including those from the UK and Canada – cannot supply more than 35% of the total value of any weapons contract financed through SAFE loans.
SAFE currently only allows European firms, along with Ukrainian and Norwegian ones – whose countries were granted access without negotiations with the Commission – to produce at least 65% of the value of defence products purchased through the programme.
This limit could be removed if the supplier’s home country signs both a Security and Defence Partnership and a separate eligibility agreement with Brussels, and contributes financially to the programme.
Some EU capitals remain cautious. Last week, a small group of countries outlined their concerns about the eligibility criteria. Paris, for instance, has previously argued for a 50% ceiling on third-country participation, in order to avoid EU funds bankrolling the UK’s defence industry rather than that of the bloc itself.
In an attempt to ease these concerns, the Commission presented its negotiation strategy to the ambassadors, proposing a 50% cap for the UK and Canada as a starting point, according to Euractiv. This would still be lower than the criteria applied to EU, Norwegian and Ukrainian firms.
The UK and Canada both struck Security and Defence Partnership deals with the EU, in May and June respectively. Both now require an additional eligibility agreement to enable their industries to participate in joint procurement projects.
However, time is running out. The Commission circulated its recommendations on 11 August, and now member states have only two months to submit their initial plans for using the loans, including details of whether UK and Canadian arms or components will be included.
(cp, de)
