France questions UK access to €5bn EU tech scaleup fund run by EQT
What's the issue? France has raised questions over UK participation in a €5bn EU equity investment fund for tech start-ups run by EQTDealroom has a profile for this one. Try Dealroom →, in a move European diplomats say highlights continuing tensions over the EU–UK "reset" negotiations. The UK, which left the EU under Brexit six years ago, has agreed to contribute €150mn in seed capital for the fund, which is designed to boost investment in Europe's tech sector as it struggles to compete with the US and China.
What is the fund? The Scaleup Europe Fund will be run on a commercial basis by EQTDealroom has a profile for this one. Try Dealroom →, the Swedish buyout firm, and is part of Horizon Europe — the €96bn research programme the UK rejoined as an "associate country" in 2024. The fund's current cycle ends in 2027; the next cycle, running until 2034, is expected to surpass €5bn, made up of €1bn in European CommissionDealroom has a profile for this one. Try Dealroom → seed funding with the balance coming from pension funds and other private capital.
Why is France objecting? Ekaterina Zaharieva, European commissioner for start-ups, research and innovation, told the FT in May there was a "mutual interest" in the UK joining, but diplomats now say Paris is seeking to attach stringent conditions. "The French are raising objections. They argue the UK is not in the EU, so why are we gifting the British opportunities when we need to ensure this initiative is an EU initiative for the benefit of EU member states," said one EU diplomat. France, alongside some other member states, also argues that side deals with the UK risk reducing EU leverage ahead of a crucial summit this autumn to finalise the "reset" package.
Is it only France? "France is taking a hard line, but three or four other member states are also asking 'what's in it for us?' if we let the UK join the Scaleup fund — some are arguing there needs to be a 'quid pro quo'," a second diplomat added. French diplomats said Paris had "no objection" in principle, but had requested details from the Commission on how the UK — as a non-EU state — should participate. "This is a technical debate. Questions have been sent to the Commission to understand the method of calculation for UK participation," they said.
What's the sticking point? EU member states face a 25 per cent cap on the amount they can attract from the pool. Outstanding questions remain on the level of the cap for non-EU members, and the link between contributions and the level of disbursement. The argument echoes discussions over UK participation in the EU's €150bn defence procurement fund, which broke down acrimoniously in November 2025 when the UK refused Brussels' demand for billions of euros in contributions.
What happens next? Diplomats say the clock is ticking to resolve French objections so the UK can be included in the next cycle of the Scaleup Europe Fund, which starts from 2027. Plans for a July 2026 summit to finalise the "reset" negotiations were shelved after the resignation of Sir Keir Starmer as UK prime minister; a new date is expected in late October or early November 2026. The UK is separately seeking to remove border checks on plant and animal products, re-link the UK and EU carbon-pricing schemes, and secure a limited Youth Experience Scheme for 18- to 30-year-olds. The UK's Cabinet Office said it would not comment on ongoing negotiations; a Commission spokesperson said it would be "premature to comment on any positions".
Read more: Financial Times
