G7 Leaders Approve $50 Billion Loan for Ukraine from Blocked Russian Assets

  • by:
  • Source: Wayne Dupree
  • 06/13/2024
The G7 leaders have agreed on a $50 billion loan for Ukraine, using proceeds from blocked Russian assets. This move is seen as a significant step by President Joe Biden, who believes it shows Moscow that the G7 is not backing down. The agreement was made during a conference in Italy, where the US and other leaders of the Group of Seven decided to use the earnings from the assets' interest to support the loan. The loan will aid Kyiv during its difficult third year of conflict with Russia.

The loan represents a "fundamental advancement in offering Ukraine long-term support in winning this war." It will benefit both defense and reconstruction. Ukrainian forces still require additional air-defence systems to assist counter strikes by Moscow. The EU has previously provided Kyiv with proceeds from interest on Russian central bank assets frozen by Western partners. However, with a sizable upfront loan, Washington has been pushing for greater and speedier assistance.

A senior Biden administration official stated that the US was ready to contribute up to $50 billion, but because it would be a collaborative effort, its amount may be "significantly less." The loan will be a syndicated loan, with other lenders sharing the risk under condition of anonymity.

Since Russia's invasion of Ukraine in February 2022, the G7 nations have been the country's principal financial and military benefactors. About 300 billion euros ($325 billion) worth of Russian assets have been frozen by the EU and the G7, with a large portion blocked by Euroclear, a Belgian international deposit organization. EU nations estimate that Kyiv might benefit from interest income of 2.5 to 3.0 billion euros annually.

German Chancellor Olaf Scholz praised the financing arrangement as a "historic step" and a clear signal to the Russian president that he cannot simply sit this matter out. Zelensky has been actively pursuing diplomatic measures to bolster international support and has signed a 10-year security agreement with Biden and another with Japan.

The summit negotiations began with a brief discussion on Africa, followed by China and Pope Francis's visit. The G7 leaders reaffirmed their support for a ceasefire and hostage agreement in the conflict between Israel and Hamas.


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