Proposed €150bn EU defence funding scheme to exclude Turkiye, US, UK

The European Union is set to benefit from a new €150 billion ($167 billion) defence funding proposal in an attempt to boost the continent’s rearmament against a Russian threat, but will exclude third countries including the United States, United Kingdom and Turkiye from the scheme.

According to the Financial Times, a European Commission proposal put forward on Wednesday showed that the funding for weapons would only be accessible to defence companies within EU member states, as well as to those in third countries that have already signed defence agreements with the bloc.

The proposal is yet to be approved by the majority of EU states, but if passed, the scheme would reportedly require at least 65 per cent of the arms costs to be spent within the EU, Norway and Ukraine, with the remainder potentially spent on products from third countries with defence agreements in place.

EU member states themselves would also be able to spend 35 per cent of the loans on products using components from Norway, South Korea, Japan, Albania, Moldova, North Macedonia and Ukraine.

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The exclusion of countries such as the US, the UK and Turkiye has, however, been met with significant concern by many, particularly as British and Turkish defence firms that have a sizeable involvement in and cooperation with numerous EU states and their defence industries,

Under the proposed funding scheme, however, Washington, London and Ankara would need to sign a security and defence partnership with the bloc in order to have access to such benefits.

The proposal comes amid a recent increased push for a more European-driven defence vision that is less reliant on external partners and suppliers, especially at a time when the US government under President Donald Trump’s administration is signalling a greater withdrawal of support for the EU and its states against a perceived military threat from Russia, three years into Moscow’s invasion of Ukraine.

According to Kaja Kallas, the EU’s foreign policy chief: “We have this opportunity to really build up the European defence industry.” Highlighting the importance of arming the bloc without foreign restrictions, she stressed that “in crisis, your military really needs to have free hands.”

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