ARMENIA — Prime Minister Keir Starmer used a summit in Armenia to begin negotiations for the United Kingdom to participate in the European Union's loan scheme for Kyiv and to open talks on joining an EU innovation fund. Starmer and European Commission President Ursula von der Leyen agreed at the summit to start discussions on UK participation in the innovation fund.

If the UK's bid to join the EU's £78bn recovery loan scheme for Ukraine succeeds, British defense firms would be able to supply equipment to Kyiv in return for a financial contribution of up to £400m, expected to come from the £3bn already ringfenced for Ukraine. He said he wished to negotiate closer links with the EU at the next reset summit this summer.

"Britain must be at the heart of a stronger Europe on defence, on security, on energy, and on our economy," Starmer said. He added: "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 also acknowledged that tensions are high between Donald Trump and Europe. "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," he said. He also said, "The damage done to economies around the world by the Middle East crisis would play out with electorates across Europe."

The EU expects the UK to increase its contributions to EU budgets in return for further access to EU markets, and the European Commission has called for a permanent mechanism for an appropriate financial contribution from the UK. European leaders agreed in March that the UK would have to pay into European structural and investment funds for the first time since Brexit to participate in the EU's single market for electricity, saying the UK's financial contribution should appropriately reflect the relative size of its economy and the proportion of the internal market in which it aims to participate.

The UK government has struck deals with the EU on food and is negotiating energy agreements as part of its reset of relations. The Cabinet Office is conducting an audit of sectors that could most benefit from further integration, with cars, chemicals and pharmaceuticals seen as a priority. Cabinet Office minister Nick Thomas-Symonds said that a figure of £1bn a year for the UK's financial contribution was incorrect.