The European Union is set to allow Ukraine to use a 60 billion euro loan to purchase weapons from Britain, in a move seen as 'conciliatory' after the two sides failed to reach an agreement allowing London to join the bloc's security defense fund, according to Bloomberg.

The European Union is nearing an agreement with Downing Street to allow British companies to benefit from the program after months of negotiations, according to Bloomberg, citing people familiar with the matter.

The sources said an announcement is likely to be made during a meeting of the 'coalition of the willing' to be held in Paris next Monday, which is led by Britain and France.

The British government did not immediately respond to a request for comment from the agency, and the European Commission declined to comment.

Commission spokeswoman Paula Pinho told reporters on Friday that Commission President Ursula von der Leyen will travel to the French capital on Monday to attend the meeting on Ukraine.

There will be no specific fees for London to pay; instead, the British government will provide a financial contribution when Ukraine chooses to use the loan to purchase military equipment from it, according to Bloomberg sources, who added that the contribution will be determined based on the value of each contract and interest costs.

'Conciliatory step'

The deal is seen as a conciliatory step by the European Union after the two sides previously failed to reach an agreement to allow Britain to join the EU's 150 billion euro security defense fund, with talks stalled due to the EU's demand for London to pay an entry fee.

Britain and some EU member states were disappointed with the outcome, which British officials described as 'frustrating,' especially in light of Russian military pressure and the positions of the US administration.

British officials said that talks on the Ukraine loan have progressed more smoothly compared to those negotiations, with member states, including notably the Netherlands, pushing for a quick deal amid widespread recognition that it would benefit Ukraine by facilitating its purchases of British weapons.

'Tactical advantage' for Ukraine

European diplomats believe that Ukraine has gained a tactical advantage over Russia in recent months, after successfully striking critical infrastructure inside the country. However, allies are making renewed efforts to send more weapons and air defenses to Ukraine before winter.

The deal was originally scheduled to be announced at the next summit between Britain and the European Union, but it has been postponed until later this year due to the resignation of British Prime Minister Keir Starmer.

With Andy Burnham advancing in the nominations to succeed him, the prime minister is expected to hand over power to the former mayor of Greater Manchester on July 20.