Government calls European Commission’s entry fee “unreasonable” as bloc prepares to launch €150bn Security Action for Europe initiative 

The UK has rejected a European Commission proposal demanding up to €6.75bn in fees to join the EU’s flagship defence-funding vehicle, according to officials familiar with the negotiations.

Brussels is seeking between €4bn and €6.5bn as an entry payment, plus up to €250m in administrative costs, for Britain to participate in the Security Action for Europe (SAFE) scheme — a €150bn fund designed to enable joint borrowing and pooled procurement among EU states.

A Cabinet Office spokesperson said: “We will only agree deals that provide value to the UK and UK industry. Nothing has been agreed and we will not give a running commentary on ongoing talks.”

UK negotiators consider the fee structure disproportionate, particularly given restrictions embedded in the scheme. Equipment financed through SAFE must source at least 65 per cent of components from the EU, European Economic Area, EFTA states or Ukraine.

SAFE, approved by EU defence ministers in May, targets joint procurement of drones, missiles, cyber-defence systems and maritime platforms. For UK contractors such as BAE Systems, Rolls-Royce and Babcock International, exclusion could mean missing out on billions in EU-backed contracts and co-financed procurement networks across the continent.

The standoff highlights tensions between Brussels’ desire to leverage UK industrial capability and pressure from member states—particularly France, which is said to have taken a hardline stance to safeguard European defence autonomy and impose strict terms on non-EU participants.

Negotiations continue ahead of a 30 November deadline for member states to submit project plans under SAFE. Failure to reach agreement risks leaving British defence firms shut out of Europe’s evolving procurement architecture at a time of heightened geopolitical uncertainty.