UK joins EU €90 billion loan to fund Ukraine's defence and budget

The United Kingdom has formally joined the European Union’s €90 billion loan scheme for Ukraine, announced by Prime Minister Keir Starmer in Paris during the Coalition of the Willing summit. The loan is designed to meet Ukraine’s financial and military needs for 2026‑2027, with €45 billion slated for 2026 – split between €16.7 billion for budget support and €28.3 billion for defence – and the remaining €45 billion reserved for 2027.

Under the agreement, British defence firms such as BAE Systems, QinetiQ and Babcock International can bid for procurement contracts funded by the loan. The United Kingdom will cover a proportionate share of the €3 billion annual interest, based on the value of contracts awarded to its companies. Starmer said, “This agreement will help ensure Ukraine gets the support it needs to defend itself against Russian aggression, while backing British defence companies, supporting skilled jobs and strengthening our national security.”

The loan includes a “Made in Europe” clause directing funds toward European producers, though the provision is under pressure due to urgent needs for US‑made Patriot interceptors. Repayment is contingent on Russia agreeing to war reparations; otherwise the EU may draw on immobilised Russian central‑bank assets. EU Commission President Ursula von der Leyen hailed the deal as a joint commitment to European security and Ukraine’s sovereignty.