France will bear the entire cost of developing the Dassault Rafale F5 fighter jet after the United Arab Emirates pulled out of funding discussions. The program, valued at around €5 billion ($5.7 billion), had seen Abu Dhabi poised to cover up to €3.5 billion ($4 billion).
Talks collapsed in late 2025 amid disagreements over technology sharing, particularly in optronics. Tensions peaked during French President Emmanuel Macron’s visit to Abu Dhabi in December, where Paris refused to grant access to sensitive capabilities despite the UAE’s push for deeper involvement in development.
France’s Defense Ministry now shoulders the full expense through an updated military programming law, set for Council of Ministers review on April 8, 2026. This adds pressure to the defense budget, which faces a €36 billion increase on top of its €413 billion baseline, and may delay F5 upgrades, deliveries, and a related stealth drone initiative.
A French Armed Forces source noted the strategy spreads costs over time to manage fiscal limits. While Franco-Emirati ties have mended amid regional conflicts, including French Rafale pilots aiding UAE intercepts of Iranian drones, sources suggest Abu Dhabi might revisit funding post-2027.