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Talks for the UK to join a €140bn EU defence fund have broken down after London refused to pay billions of euros in fees.
EU ambassadors rejected a UK offer to pay several hundred million euros into the Security Action for Europe (Safe) fund on Friday, people familiar with the matter said.
The Financial Times reported last week that Brussels had put a €2bn price tag on the UK taking part.
The loan guarantee scheme is designed to help boost European defence spending and allow countries to jointly procure new weapons by borrowing money guaranteed by the EU budget.
The European Commission, the bloc’s executive arm, said talks could restart, with the money not due to be committed for several months.
Under current rules, EU countries can still spend up to 35 per cent of the rearmament fund with UK defence companies. If the UK were to join Safe, this could rise as high as 50 per cent.
“The UK can still benefit,” said European Commission spokesman Thomas Regnier.
This is a developing story
