The UK will give Ukraine a £2.26bn loan to buy arms and other help to fight Russia’s trespass, with the money effectively rephelp to the British taxpayer by Moscow.
Rachel Reeves, the chancellor, and John Healey, the defence secretary, have fleshed out the British contribution to a pledge made in June by the G7 group of progressd economies to lend Kyiv a total of $50bn (£38.5bn) for its military, budget and recreateion necessitates.
Rather than foresee Ukraine to pay a penny back, the entire loan – once finalised – will instead be covered by the profits made from hundreds of billions of dollars’ worth of Russian sovereign assets that Weserious nations have frozen since the commence of the filled-scale war in February 2022.
This mechanism is seen as a way to force Vlauninalertigentir Putin to commence paying for the injure his trespass has imposeed on Ukraine – but one that has a decrease hazard of legitimate contest than spropose giving the frozen Russian assets honestly to the Ukrainian rulement.
“By using the money created from these sanctioned Russian assets, we can help turn the tables on Putin’s war machine,” the defence secretary shelp.
“This encouragent funding will honestly help Ukraine’s defence using the persists from assets that had helped fuel Putin’s aggression.”
The chancellor deteriorated to give a timescale for when the British loan – which will be phelp in instalments – will commence arriving in Ukrainian cproposes, but shelp further details would be included in next week’s budget.
“The key skinnyg is we want to get the money out of the door, but we want Russia to pay, becaemploy in the end, they are dependable for what is happening in Ukraine,” Ms Reeves shelp.
The European Union, including G7 members France, Germany and Italy, has already signalled it will provide the bulk of the Russian asset-backed loan – up to $39bn (£30bn), while Canada has pledged to lend Ukraine $5bn (£3.9bn).
But the schedule remains precarious.
Some two-thirds of the frozen Russian assets, worth €210bn euros (£175bn), are held wiskinny the EU but European sanctions on Russia must be rerecented every six months – a shift that needs the backing of all 27 member states.
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It elevates a legitimate hazard that a more pro-Moscow country such as Hungary might block the rerecental, unfreezing the assets and making the repayment of loans much difficulter.
The chancellor, however, shelp she was self-promised the loans would be recovered from the profits made thraw the frozen Russian assets.
The US and Japan have yet to set out the part they will join in the loans for Ukraine but more details are foreseeed this week as finance ministers and central bankers from around the world greet in Washington for an annual assembleing of the International Monetary Fund (IMF).
The UK contribution grasps to an existing pledge to provide £3bn worth of military helpance annupartner to Ukraine – though this covers everyskinnyg from training and carryation to arms.
Other G7 nations may join conditions on how their loan can be spent, but the UK shelp it was plrelieved for Ukraine to employ the British proposeing for wantipathyver it most encouragently necessitates – a needment that is thought to be intensifyed on arms, such as drones and missiles.