Under SAFE, third countries can account for a maximum of 35 percent of the value of a weapons system paid for by the scheme; the U.K. was negotiating for a higher percentage, which would benefit the country’s large arms industry.
The negotiations have been tough, with London and Brussels clashing over how much the U.K. would have to pay to participate in joint procurements financed by SAFE. The U.K. was offering only millions of euros, while the EU slashed its initial request for London to pay between €4.5 billion and €6.5 billion to a lower €2 billion.
A U.K. official stressed London sought to “base our offers on a clear, rigorous methodology” but there “was just too big a gap” with Commission expectations.
Even without an agreement, the U.K. can still take part in joint procurements under the 35 percent threshold.
“We’re still bullish about prospects for the U.K. exports industry — we’re firmly in the in the place of wanting to work with our European allies. It’s bigger than this one scheme,” the same U.K. official said.
The head of the Commission’s Directorate-General for Defence Industry and Space, Timo Pesonen, told EU ambassadors on Friday morning that there’s no deal with the U.K., a diplomat told POLITICO.