The giant loan to Ukraine would be covered by revenues from frozen Russian assets.
The world's most developed countries have agreed to provide Ukraine with a $50 billion loan package from the revenues from Russian frozen assets. The leaders of the G7 countries held talks before the weekend peace summit in Ukraine with the participation of Ukrainian President Volodymyr Zelenskyi.
America would strengthen Ukraine
At the meeting, US President Joe Biden and Ukrainian President Zelenskyi also agreed on a 10-year US-Ukrainian defense cooperation, which Kiev believes is of historic importance.
Part of the security agreement is that Washington
• strengthens Ukraine's defense and deterrence capabilities,
• participates in the development of the country's defense industry
• and supports economic recovery and energy security.
The security agreement does not include a provision that the United States would provide protection in the event of a future Russian armed attack on Ukraine; but it is recorded that
consultations at the highest level will take place to determine appropriate and necessary measures to support Ukraine and impose costs on Russia.
Frozen Russian assets are a good deal
It was also revealed at the G7 summit that since the beginning of the conflict in 2022
Russian assets worth 325 billion dollars were frozen by the countries that introduced the sanctions.
Ukraine would borrow the 50 billion dollar loan from the international market, but Kiev could pay its interest from the profit from frozen Russian assets, according to preliminary expectations, this income means 3 billion dollars a year.
So far, Europe has not bowed to Washington's request
Italian Prime Minister Georgia Meloni confirmed after the meeting that the European Union is not participating in the 50 billion dollar loan for the time being. According to him, Europe has already contributed to the loan through various guarantee mechanisms.
The absence of the EU could be expected, as the Washington proposal was recently leaked, which would have expected the union to provide a guarantee that there would be no problem with the repayment of the loan. The United States wanted to persuade the leaders of the EU member states that Europe should extend the sanctions against Russia, which are currently in place for a fixed period of time - and have been repeatedly extended - for an indefinite period. In this way, it is guaranteed that the frozen Russian assets will cover the disbursement of the giant loan in the long term.
Zelensky is not completely satisfied
Ukrainian President Volodymyr Zelenskiy also called the decision made at the G7 summit of historic importance. At the same time, the president noted that the 50 billion loan would not be available in one lump sum, instead he wanted to achieve the transfer of Russian assets worth more than 300 billion dollars. This was previously rejected by the European Central Bank, as such a decision would be a violation of international law.
Euroclear, based in Belgium, registers the equivalent of EUR 190 billion in Russian central bank securities and cash.
Western banks also hold assets worth billions of euros, pounds and dollars owned by sanctioned companies and individuals. The central securities depository based in Belgium, which has some of the world's largest banks among its shareholders, can temporarily keep 10 percent of the profits of the frozen Russian assets in preparation for litigation. Last year, the EU made a profit of 4.4 billion euros from Russian assets seized through sanctions.
Featured image: Ukraine's Volodymyr Zelensky (b) and US President Joe Biden after signing a bilateral security agreement at the end of a bilateral meeting on the sidelines of the G7 summit of the Group of Seven, the world's most industrialized nations, in Savelletri on June 13, 2024, in Savelletri, Russia on June 13, 2024. during war. MTI/AP/Alex Brandon
