The European Union has announced plans to exclude arms companies from the United States, the United Kingdom, and Turkey from a new €150bn defense fund unless their respective governments sign security pacts with Brussels. The proposal, introduced by the European Commission on Wednesday, marks a significant step in the bloc’s efforts to bolster its own defense industry while reducing reliance on non-EU suppliers.
The defense fund is designed to finance arms procurement exclusively for European defense companies or those from third countries with formalized security agreements with the EU. Furthermore, any advanced weapons systems developed outside the EU and subject to foreign control—such as the US-made Patriot air defense system—will also be excluded from eligibility.
The initiative is widely seen as a victory for France, which has championed a “Buy European” approach to strengthen the continent’s defense capabilities amid growing uncertainty over long-term US commitment to European security.
Push for Strategic Autonomy
According to the plan, at least 65% of the production cost of defense products must remain within the EU, Norway, or Ukraine. The remaining 35% could be allocated to defense components from select third-party nations, including South Korea, Japan, and Moldova, among others.
“We have this opportunity to really build up the European defense industry,” said Kaja Kallas, the EU’s chief diplomat, emphasizing the importance of military capabilities that are free from foreign-imposed restrictions. The war in Ukraine, she added, has demonstrated the necessity of having weapons that EU forces can use without external limitations.
Implications for the UK, US, and Turkey
The UK has been actively lobbying for inclusion in the initiative, given its deep defense ties with European countries such as Italy and Sweden. However, negotiations between London and Brussels have been stalled due to broader political disagreements, including migration policies and fishing rights.
The proposal is also expected to create complications for major US defense contractors, as it explicitly prohibits systems where a third country has final control over deployment and usage. This means that even widely used US-made platforms, such as those from RTX and Lockheed Martin, could be rendered ineligible for EU-backed purchases.
For Turkey, the exclusion underscores its increasingly complex relationship with the EU. Despite being a NATO ally, Ankara’s defense partnerships with non-EU actors, including Russia, have led to growing tensions with Brussels.
Resistance from Within the EU
Not all EU member states fully support the initiative. Countries with deep defense industry ties to non-EU firms, such as Germany, Italy, Sweden, and the Netherlands, have expressed concerns about potential disruptions to supply chains and ongoing defense projects.
“We stand ready to work together on European defense in the interests of wider European security to prevent fragmentation in European defense markets,” a British official stated in response to the policy shift.
The proposal is set to be reviewed and voted on by EU member states in the coming months. If approved, it could mark a turning point in Europe’s military-industrial policy.
