The Security and Defence Partnership which the government agreed with the European Union this week has had more spin applied to it than a thousand cricket balls. The central argument in its favour, apart from vacuous reiki-like attempts to change the ‘mood’ of relations with the EU, was that it would allow the UK defence sector to engage with the Security Action for Europe (SAFE) loan instrument providing €150 billion (£127 billion) for defence procurement over the next five years. It does not do that.
You would be hard pressed to realise that the partnership has not succeeded in what many saw as its central purpose. Weasel words came in a pack, and some commentators were openly untruthful, but the ‘ambitious’ deal says only that ‘possibilities for establishing an administrative arrangement between the UK and the European Defence Agency (EDA) will… be explored’. The most positive official statement of the whole summit was a single sentence in the ‘Common Understanding‘ document drawn up after Monday’s summit:
France’s leaders have a long history of acting ruthlessly and effectively in the national interest
The United Kingdom and the European Commission should swiftly explore any possibilities for mutually beneficial enhanced cooperation created by the SAFE instrument, once adopted, in accordance with their respective legal frameworks.
For UK manufacturers to be able to participate, then, will require further agreement, and there are continuing signs of division among the EU’s 27 member states about how much of that might be achieved. When the SAFE initiative was announced, it stated clearly that it applied only to companies in the EU, Norway and Ukraine, as well as countries which had agreed security pacts with Brussels. I suggested at the time that this was because France and, to a lesser extent, Germany wanted to place their defence industry in an advantageous position. That was booed down as Eurosceptic, cynical, refighting the battles of Brexit.
Now, however, rumours from Brussels suggest that Britain’s potential involvement could be subject to ‘conditions’ and that the scheme will maintain a ‘European preference’. One possibility is that UK manufacturers will only be eligible if they engage in joint projects with EU counterparts, and there may be limits on the amount British firms could draw from the loan scheme. While Germany, which has a significant defence industry, now supposedly backs extensive British involvement, France is reported to want to exclude UK firms from 85 per cent of the fund’s total value.
I do not blame the French for taking this stance. France’s leaders have a long history of acting ruthlessly and effectively in the national interest, and the shape of that interest here is obvious. With the United States excluded, and procurement from China manifestly a non-starter, the biggest players in the defence field are BAE Systems (UK), Airbus (France/Netherlands), Leonardo (Italy), Thales (France), Rheinmetall (Germany), Rolls-Royce (UK) and Naval Group (France).
Remove UK-based companies, and the agenda is very obvious. Other French companies like Safran, Dassault and KNDS France also come into play. Remember also that Airbus, Thales, Naval Group, Safran and KNDS France are part-owned by the French government. It wants to see as much of this €150 billion loan scheme directed towards not only French companies but companies in which the government has a stake, and why would it do anything but that?
Speaking in the House of Commons on Tuesday, Keir Starmer said that the Security and Defence Partnership ‘paves the way for British defence firms to access the EU’s €150 billion defence fund. That will support British jobs, British wages and British livelihoods’.
That is true, insofar as it goes, but it does not require an uncharitable mind to find it misleading. The Prime Minister clearly wanted his listeners to think that if access to SAFE had not actually been achieved, then doing so would merely be a formality, as was obvious from the way he hurried on to talk about jobs, wages and livelihoods. This is just not true.
Starmer has been on ebullient form this week, and with an historically large Commons majority behind him there has been nothing to temper his flush of success. He has not lied about the Security and Defence Partnership, but he has yielded to two of his most common weaknesses: stating the most optimistic scenario possible as if it were an inevitable outcome; and regarding as tantamount to fact things which he wants to be true.
It is not inevitable that British companies will be pushed to the margins of the SAFE loan scheme, but it is entirely possible. If it does happen, the Prime Minister will have to explain exactly what is left of this ‘ambitious’ partnership. The Art of the Deal, the best-selling book President Trump pretends to have written, says:
If you ask me exactly what the deals I’m about to describe all add up to in the end, I’m not sure I have a very good answer. Except that I’ve had a very good time making them.
Even that does not seem true of the Prime Minister. The threads he is clutching at are getting thinner every day.
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