UK May Reap Benefits from EU Loan for Ukraine if it Agrees to Help Pay Costs
A €90 billion loan package for Ukraine signed off by European Union leaders on Wednesday could provide a significant boost to the UK's defense industry and interests in the region, should London agree to contribute financially towards the borrowing costs.
The deal includes a clause that would allow British firms to supply defense equipment to Ukraine, provided they can demonstrate a "fair" contribution towards EU borrowing costs. This is seen as a potential game-changer for UK companies looking to tap into the lucrative Ukrainian market.
Under the plan, Ukraine would be required to purchase military equipment from domestic suppliers within the EU or closely associated countries such as Norway. However, if critical kit is not available in those countries, Kyiv could secure permission from Brussels to buy from other nations, including the US.
The EU has introduced a new clause aimed at giving Ukraine greater flexibility to buy from non-EU countries that have signed security pacts with the union. This includes the UK, which would be required to provide a financial contribution commensurate with the value of contracts won and demonstrate significant financial and military support to Ukraine.
While no specific figure for a "fair" UK contribution has been proposed, EU diplomats see it as a natural step to ask London to participate in interest repayment proportionally to its potential involvement. The move is seen as an attempt to avoid intense focus on finances, while others argue that proposing a UK contribution would be impossible without knowing the extent of British involvement.
The loan package is expected to cover two-thirds of Ukraine's funding needs and other international partners are set to fill the gap. With the European parliament now needing to approve the deal, the first tranche of funds is slated to release in April.
UK Prime Minister Keir Starmer has signalled a willingness to reopen talks with the EU on a defense pact, which could pave the way for increased cooperation and potentially significant opportunities for British firms operating in Ukraine.
A €90 billion loan package for Ukraine signed off by European Union leaders on Wednesday could provide a significant boost to the UK's defense industry and interests in the region, should London agree to contribute financially towards the borrowing costs.
The deal includes a clause that would allow British firms to supply defense equipment to Ukraine, provided they can demonstrate a "fair" contribution towards EU borrowing costs. This is seen as a potential game-changer for UK companies looking to tap into the lucrative Ukrainian market.
Under the plan, Ukraine would be required to purchase military equipment from domestic suppliers within the EU or closely associated countries such as Norway. However, if critical kit is not available in those countries, Kyiv could secure permission from Brussels to buy from other nations, including the US.
The EU has introduced a new clause aimed at giving Ukraine greater flexibility to buy from non-EU countries that have signed security pacts with the union. This includes the UK, which would be required to provide a financial contribution commensurate with the value of contracts won and demonstrate significant financial and military support to Ukraine.
While no specific figure for a "fair" UK contribution has been proposed, EU diplomats see it as a natural step to ask London to participate in interest repayment proportionally to its potential involvement. The move is seen as an attempt to avoid intense focus on finances, while others argue that proposing a UK contribution would be impossible without knowing the extent of British involvement.
The loan package is expected to cover two-thirds of Ukraine's funding needs and other international partners are set to fill the gap. With the European parliament now needing to approve the deal, the first tranche of funds is slated to release in April.
UK Prime Minister Keir Starmer has signalled a willingness to reopen talks with the EU on a defense pact, which could pave the way for increased cooperation and potentially significant opportunities for British firms operating in Ukraine.