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UK agrees deal to join EU Ukraine Support Loan scheme - Finance news and analysis from Global Banking & Finance Review
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UK agrees deal to join EU Ukraine Support Loan scheme

Published by Global Banking & Finance Review

Posted on July 13, 2026

2 min read

· Last updated: July 13, 2026

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UK Signs Agreement to Join EU Ukraine Support Loan Scheme, Enhancing Defence Ties

Britain's Participation in the EU Ukraine Support Loan Scheme

Background and Signing of the Agreement

LONDON, July 13 (Reuters) - Prime Minister Keir Starmer signed Britain up to a European Union defence loan scheme for Ukraine on Monday, one of his last acts as the nation's prime minister to try to improve London's ties with the bloc after years of wrangling over Brexit.

Details of the Loan Scheme

Starmer announced the agreement, which will give British defence firms access to contracts funded by the €90 billion ($102.59 billion) Ukraine Support Loan, as he arrived in Paris for a meeting of the Coalition of the Willing group of Ukrainian allied countries.

Official Statement and Expected Impact

"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," Starmer said in a statement.

Context of the Agreement

Previous Attempts at EU Defence Cooperation

The British government hailed its involvement in the loan after London's plan to join a separate €150 billion EU fund to invest in bolstering European defences broke down in November after Starmer's government balked at the scale of the financial contribution requested by the bloc.

Starmer's Priorities and Leadership Role

Starmer has made Britain's support for Ukraine one of his main priorities, seeing his leadership alongside French President Emmanuel Macron and German Chancellor Friedrich Merz as one of the highlights of his premiership.

Transition of Leadership

His participation in the latest Coalition of the Willing group marks one of his last foreign outings before standing down on July 20 to make way for former Greater Manchester mayor Andy Burnham, who has also vowed to support Ukraine as it defends itself against Russia's four-year war.

Additional Information

($1 = 0.8773 euros)

(Reporting by Muvija M, Writing by Elizabeth Piper and William James; Editing by Alison Williams)

Key Takeaways

  • UK has joined the EU’s €90 billion Ukraine Support Loan for 2026–2027, a limited‑recourse loan split between €60 billion for defence and €30 billion for budgetary support (economy-finance.ec.europa.eu).
  • The deal permits British defence firms to bid for contracts under the EU scheme, strengthening defence industrial ties post‑Brexit (reddit.com).
  • €7.1 billion has already been disbursed under the loan by late June 2026, including funds earmarked for drone procurement, highlighting the urgent delivery of military aid (consilium.europa.eu).

References

Frequently Asked Questions

What is the EU Ukraine Support Loan scheme?
The EU Ukraine Support Loan scheme is a €90 billion fund aimed at supporting Ukraine's defence and recovery, with contracts available to European and now British defence companies.
How does the UK's participation benefit British defence firms?
UK defence firms can now access contracts funded by the EU's Ukraine Support Loan, creating opportunities for skilled jobs and supporting the UK defence sector.
Why did the UK government join the EU Ukraine Support Loan?
The UK joined to support Ukraine against Russian aggression, back British defence companies, and strengthen UK national security and ties with the EU.
What happened with the EU's €150 billion defence fund proposal?
The UK did not join the larger €150 billion EU defence fund after disagreements over the requested financial contribution.
Who will succeed Prime Minister Keir Starmer, and what is their stance on Ukraine?
Andy Burnham will succeed Starmer as Prime Minister and has also vowed to continue supporting Ukraine in its defence against Russia.

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