Britain puts foot down on EU defence agency budget

BRUSSELS, Nov 19 (Reuters) - Britain on Monday blocked a three-year budget for the agency coordinating Europe's national defence industries, in the latest move highlighting tensions over EU military ambitions.

The European Defence Agency (EDA) had sought funding for 2008-2010, but the British veto meant EU defence ministers meeting in Brussels could only approve next year's budget, set at 32 million euros ($47 million).

"We don't back a budget without seeing what we are paying for," said a British official. "We need to be convinced there is a reason."

Britain has been traditionally sceptical of the role of the EDA, which has sought to coordinate how EU capitals invest in key defence equipment and research, suspecting the body could turn into an expensive bureaucracy.

France is a strong backer of the EDA, seeing it as a way to avoid duplication in national defence projects and so get more value for Europe's relatively limited military spending.

"This is barely enough to keep the agency afloat," said one EU diplomat of the level of the 2008 budget.

EDA Chief Executive Alexander Weis noted the funding was an increase on the 22 million euros the Brussels-based agency won for this year.

"I am glad to have a budget. It is not enough to convince 25 member states, we have to convince 26," Weis said at the news conference of the need for unanimity among the agency's 26 members.

France is preparing proposals for a revamp of the EU's four-year-old defence and security strategy as part of its possible return to NATO military structures, from which Paris pulled out in the 1960s.

Britain is watching Paris closely for signs of what it will propose and Foreign Secretary David Miliband insisted last week no new institutions were needed to run EU defence.

The comment was widely interpreted as a reference to longstanding French backing for an EU command centre to run the bloc's fledgling military presence. (Reporting by Mark John; Editing by Golnar Motevalli)