UK opens EU negotiations to team up on 90 billion euro Ukraine loan

The U.K. is entering talks with the EU to participate in providing a 90 billion euro ($105 billion) loan to Ukraine, British Prime Minister Keir Starmer announced at a meeting of European leaders in Armenia on May 4.

EU leaders agreed to provide Kyiv with the financial assistance package in April after outgoing Hungarian Prime Minister Viktor Orban dropped his veto. The EU is now approaching capital markets to borrow the funds, and the first disbursement is expected in late May.

Of the 90 billion total, 45 billion euros ($53 billion)  is expected to be granted in 2026, of which 28 billion euros ($33 billion)  is to be earmarked for defense.

Starmer and European Commission President Ursula von der Leyen met bilaterally during the European Political Community summit in Armenia, where the two agreed that U.K. participation "would be a major step forward in the EU-U.K. defense industrial relationship."

"When the U.K. and the European Union work together, we all reap the benefits — and in these volatile times we need to go further and faster on defense to keep people safe," Starmer said.

However, warm words about the EU and the U.K. teaming up on defense have been thrown around before, only to amount to nothing.

The U.K. and the EU haggled in 2025 over the terms under which British companies could be granted special status within the EU's 150 billion-euro (about $175 billion) SAFE defense loan program, but without success.

Negotiations fell apart in November over disagreement on the amount the U.K. should pay to participate in the program. In the end, only one country signed such an agreement with the EU — Canada.

The 90 billion loan has the same eligibility requirements for its defense allocation as the SAFE loans, namely that 65% of the value of components sourced for any defense purchase must be from the EU, the European Economic Area (Norway, Iceland), or Ukraine.

However, this time it could be easier to reach an agreement, for two reasons.

First, the EU has shown it is more relaxed about allowing non-EU countries to receive defense money. Ukraine was already granted an exemption to use the defense portion of the incoming loan for drone parts from a third country.

A senior EU official told the Kyiv Independent that the country was China.

And when it comes to repaying the loan, the EU's Economy Commissioner Valdis Dombrovskis told the Kyiv Independent that Europe will have to discuss again using Russia's frozen assets.

This matters because Belgian Prime Minister Bart De Wever blocked the EU from using frozen assets in December 2025. In doing so, he set three conditions, one of which was that other Western countries holding Russian assets should commit to similar arrangements.

The U.K. has immobilized 25 billion pounds ($34 billion) in Russian assets.

A U.K. government press release says the two sides "will negotiate the parameters of the access in the coming weeks."

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