"The European Commission is planning to issue billions of pounds in loans to EU countries to help them buy weapons together. British ministers want to conclude a deal in the coming weeks to allow UK-based firms to take part in contracts funded by the loans. The agreement will set limits on how much British firms can contribute to projects, with the EU also demanding the UK pay an entry fee to take part."
"The Security Action for Europe (SAFE) scheme, announced in March, is part of an EU-wide effort to rearm after Russia's full-scale invasion of Ukraine. It will see the European Commission borrow up to 150bn (130bn) to fund long-duration loans to support projects involving at least two EU countries. It aims to boost defence spending by allowing EU countries with higher borrowing costs to take advantage of the Commission's favourable credit rating."
"The loans will be able to fund the purchase of kit including ammunition, artillery, missile defence systems and military drones. The UK cannot apply for such loans, but a defence pact agreed with the EU in May paved the way for UK-based defence companies to contribute to projects that receive funding from the scheme. Officials will now thrash out a further deal to set the details of British participation, after EU ministers formally authorised negotiations on Thursday."
SAFE will let the European Commission borrow up to 150bn (130bn) to provide long-duration loans helping at least two EU countries buy ammunition, artillery, missile defence systems and drones. The scheme aims to lower borrowing costs for member states by leveraging the Commission's favourable credit rating. The UK cannot apply for the loans directly, but a May defence pact allows UK-based defence companies to participate in projects funded by SAFE. Negotiations will determine participation details, including an entry fee for the UK and limits on how much British firms can contribute, currently capped at 35% of a finished defence product.
Read at www.bbc.com
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