Starmer lauds £78bn EU loan for Ukraine amid increased Trump tensions

Original article by Pippa Crerar Political editor

Keir Starmer has said the benefit of joining the European Union’s £78bn loan scheme for Ukraine “outweighs the cost” as he argued the continent must move at pace to bolster its own defence.

The prime minister, who said the UK’s involvement in the recovery loan plan would also help create jobs at home, acknowledged that tensions were high between Donald Trump and Europe, particularly over military issues.

With European leaders concerned over the US president’s waning interest in the Ukraine war, Starmer used a meeting of the European Political Community in Armenia to begin negotiations to participate in the EU scheme.

“The benefit there outweighs the cost. But more generally, it is important that we see our future as a closer relationship with the EU that’s in our national interest,” Starmer told reporters at the summit.

He also used the trip to continue his push for closer ties with the bloc on defence, security and the economy, and to make the case for his reset with Brussels to UK voters before difficult local elections this week.

As the Nato military alliance comes under intense pressure from Trump’s threats amid a difference in stances on the war in Iran, Starmer said: “We cannot deny that some of the alliances that we have come to rely on are not in the place we would want them to be.

“There is more tension in the alliances than there should be and it’s very important that we therefore face up to this as a group of countries together.”

If the UK’s effort to join the EU’s £78bn recovery loan scheme for Ukraine is successful, British defence firms would be able to provide equipment for Kyiv in return for a financial contribution of up to £400m, expected to come from the £3bn already ringfenced for Ukraine.

But the EU expects the UK to go further in contributing to its budgets, in return for further access to its markets, after Starmer called for “deeper economic integration”.

Brussels has also called for a permanent mechanism for an “appropriate financial contribution” from the UK for more access, with deals already struck with the EU on food and under way for energy as part of the government’s reset.

At the summit in Armenia, the prime minister and the European Commission chief, Ursula von der Leyen, agreed to start talks on UK participation in an EU innovation fund and to be “ambitious” at this summer’s UK-EU summit.

European leaders agreed in March that the UK would have to pay into European structural and investment funds (ESIFs) for the first time since Brexit if it wanted to participate in the EU’s single market for electricity.

It said this financial contribution should “appropriately reflect the relative size of the UK’s economy and the proportion of the internal market in which the UK aims to participate”.

Nick Thomas-Symonds, the Cabinet Office minister, accepted the UK was willing to make a financial contribution, arguing the principle was already well established, but suggested a reported figure of £1bn a year was incorrect. “It’s about judging whether in particular areas, it represents our national interest, and value for money with the UK taxpayers. The approach I’ve used the last few years, I’ll continue to,” he told LBC radio.

The Cabinet Office is conducting an audit of which sectors could most benefit from further integration, with cars, chemicals and pharmaceuticals seen as a priority.

In an interview with the Observer at the weekend, Starmer underlined his wish to negotiate closer links with the EU at the next “reset” summit this summer, saying the world had changed since the Brexit vote.

“It [Brexit] has damaged our economy and there’s no doubt in my mind where the national interest lies,” he said. “Britain must be at the heart of a stronger Europe on defence, on security, on energy, and on our economy.”