Britain announced on Friday that talks to join the European Union Defense Fund (SAFE) have collapsed, representing a major setback to efforts to reset relations after Britain’s exit from the bloc, which were widely welcomed efforts to strengthen the continent’s defences.

Britain’s European Relations Minister Nick Thomas-Symonds said: “Although it is disappointing that we have not been able to conclude discussions on Britain’s participation in the first round of the European Defense Fund, the British defense industry will still be able to participate in projects through the fund on third-country terms.”

He added, “The negotiations were conducted in good faith, but our position was always clear that we would only sign agreements that serve the national interest and provide value for money.”

Last May, British Prime Minister Keir Starmer expressed the “new era” in Britain’s relationship with the European Union after concluding an agreement to reset defense and trade relations that allowed Britain to negotiate to join a $173 billion fund to rearm Europe.

But two days before the deadline for the conclusion of the talks, Britain said that reaching an agreement was not possible.

Under the terms of the fund, supply contracts must ensure that the cost of components coming from outside the European Union or from other participating countries such as Ukraine does not exceed 35%.

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