EU defence fund won't destroy the Brexit reset

The headlines seemed pretty clear, pretty disappointing – even pretty petty after all of Keir Starmer’s glad-handing around Europe. “EU shuts Britain out of €150bn rearmament fund” said the Daily Telegraph. “British arms industry blocked,” said the Times. “So much for the Brexit reset!” sneered the Mail.

The reaction came on the back of new rules governing loans from Brussels for EU27 countries ramping up their defence spending in the wake of American abdication. The money can only be used to buy arms from other EU nations, or Ukraine, or countries in the EU-allied European Economic Area (EEA) and European Free Trade Association (EFTA) like Norway. Britain, which might have capitalised had Boris Johnson not opted for a more distant trade relationship after Brexit, is out.

“The exclusion of British companies will be a disappointment for the government,” claimed the Telegraph, but the reality is that Starmer will not be disappointed at all. Since the UK is not a member of the EU, EEA or EFTA and the prime minister is not a fantasist in the Johnson or Liz Truss mould, he won’t have expected something for nothing.

And he will know that the EU’s position – it says the UK can join in once a defence and security partnership is agreed – makes it easier to sell the country on a closer relationship with Brussels, one he seeks to deliver at the joint summit on May 19.

It is almost a given that the defence and security deal will be done by then, with European Commission vice-president Kaja Kallas, the EU’s top diplomat, telling journalists on Wednesday: “We are working on having this defence and security partnership with the UK. I’m really hoping that for the summit in May, we can have results.”

It looks increasingly likely that much more will be announced, including significant advances on cutting Brexit red tape by easing Sanitary and Phytosanitary (SPS) checks. The much-discussed youth mobility scheme also looks set to be signed on May 19, with Starmer talking of “good progress” in the Commons on Wednesday.

A new deal on post-Brexit fishing rights presents the greatest risk of incurring Brexiteer wrath, and a “senior government source” was dispatched to tell the Times that UK exclusion from EU arms purchases all came down to Emmanuel Macron’s demands for greater quotas. “It is astonishing how puerile the French are behaving. They have not grasped the enormity of the moment,” the source said. “Europe needs Britain’s defence industry a bit more than the French need a few extra fish.”

If those quotes sound performative, it is most likely to be because they are – the smart money says both sides are prepared to have a public row over fish as shows of individual strength, making an eventual “breakthrough” all the sweeter when it arrives.

So much for the Brexit reset? You only have to read between the lines to see that it is very much alive – and becoming more vital than ever.