France Pushes for 50% Cap on UK Components in €150bn EU Defence Fund

France is proposing a new measure to impose a 50% cap on UK components in projects funded by the European Union’s €150 billion SAFE (Security Action for Europe) defense initiative. The proposed restriction would limit British-made content in EU defence contracts, even after the UK signed a security cooperation deal with Brussels in May.

The French cap on UK components in the EU defence fund is designed to prioritize European manufacturing within defence procurement. French officials argue that this limit will reinforce “strategic autonomy” for the EU’s defense sector by ensuring that a majority of taxpayer-funded contracts remain within the bloc or are subject to strict controls.

Although the UK is not an EU member, its firms had hoped for greater participation following the signing of the security agreement. Under current arrangements, UK firms can contribute up to 35% of a project’s value. France’s cap would raise that threshold to 50%, but only within a tightly monitored framework.

Backlash from the UK Defence Sector

UK defence firms are raising concerns that the proposed French cap on UK components in the EU defence fund could stifle competition and marginalize British companies. Industry insiders fear the cap could disadvantage UK suppliers during bidding processes, especially if EU primes are required to favour domestic inputs.

Critics also warn that the policy may backfire by increasing costs or delaying delivery of critical defence systems due to limited sourcing flexibility.

EU Member States Divided

Some EU member states are reportedly resisting the cap. They argue that rigid sourcing rules could weaken the fund’s strategic intent by reducing access to advanced technology from trusted partners, such as the UK.

Meanwhile, technical talks are ongoing to finalize the UK’s participation framework, including joining fees, governance rules, and procurement eligibility. Until a complete agreement is reached, UK firms face uncertainty.

France’s cap on UK components in the EU defence fund may reshape the European defence landscape. It signals France’s ambition to assert industrial sovereignty, but also tests the limits of post-Brexit cooperation on continental security.