Britain announced on Friday that negotiations to join the European Union’s €150 billion defence fund, SAFE, have failed—delivering a blow to Prime Minister Keir Starmer’s pledge of a “new era” in UK-EU relations.
The breakdown comes just two days before the deadline to conclude talks. The fund, designed to boost Europe’s rearmament and defence capacity, requires procurement contracts to source at least 65% of components from within the EU or participating states such as Ukraine.
Nick Thomas-Symonds, Britain’s minister for European Union Relations, confirmed the setback but stressed that UK firms would still be able to take part in projects under third-country terms. “Negotiations were carried out in good faith, but our position was always clear: we will only sign agreements that are in the national interest and provide value for money,” he said.
Despite the collapse, shares in Britain’s largest defence contractors—BAE Systems, Rolls-Royce, and Babcock—remained unaffected.
An EU Commission spokesperson declined to comment directly on the talks but noted they had been “intense” and “constructive.” The spokesperson added that SAFE was “open by design,” meaning Britain could still participate within the 35% external sourcing limit.
Starmer had hailed the May agreement to reset defence and trade ties with Brussels as a cornerstone of his foreign policy. Friday’s announcement, however, underscores the challenges of translating political goodwill into binding defence cooperation.
“We of course remain fully committed to delivering our ambitious UK-EU security and defence partnership,” the Commission said.