Saturday, July 13, 2024

G7 states agree huge loan for Ukraine using frozen Russian assets

G7 leaders are meeting for a summit in southern Italy from Thursday to Saturday.

• June 13, 2024
G7 leaders
G7 leaders [Photo Credit: BBC]

Diplomats said on Thursday, the first day of the G7 summit in Italy, that G7 states have agreed to lend Ukraine $50 billion using money generated from frozen Russian state assets.

War-ravaged Ukraine will use the loan package to strengthen its military defence against Russia, pay for the reconstruction of infrastructure, and fund Ukraine’s state budget.

The U.S. government says around $280 billion of Russian central bank money has been immobilised in Western countries due to sanctions imposed since the full-scale Russian attack on Ukraine more than two years ago.

The bulk of the money is within the European Union.

The bloc’s member states recently approved using interest income generated from Russian state assets to finance aid for Ukraine.

The Brussels-based financial institution Euroclear, by far the largest holder of frozen Russian central bank assets in the EU, recently said that it had collected around $4.7 billion in interest in 2023.

Planning for the structure of the loan package has been underway for months.

The United States had originally campaigned in favour of collecting not only the interest income but also the frozen assets themselves and using them to provide financial support to Kyiv.

Some European capitals, however, had major reservations about this.

G7 leaders are meeting for a summit in southern Italy from Thursday to Saturday. 


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