G7 Backs Plan to Use Frozen Russian Assets to Finance Ukraine
Finance ministers from the Group of Seven (G7) have endorsed the idea of providing Ukraine with a loan backed by profits from frozen Russian assets. These funds are intended to support Ukraine’s economic and defence needs beyond 2024, according to the Financial Times.
The discussion among G7 ministers revolved around a US proposal to grant Ukraine a loan of approximately $50 billion, to be repaid with profits from frozen Russian central bank assets worth around €190 billion. The ministers indicated they had made progress in developing options for using these profits, and added that credit options would be presented to G7 leaders before the summit in June.
According to sources familiar with the negotiations, many details of the loan remain unresolved, including the amount, the providers, and how it would be guaranteed in case of Ukraine’s default or if profits are not realized. Nonetheless, G7 countries are actively working to resolve all contentious issues.
One official noted that Europeans are particularly concerned about the "fair distribution of risks," fearing that Europe might bear the brunt of financial and legal risks, as well as potential retaliatory actions from Russia, given that most of the frozen assets are located on the continent.
It is noteworthy that this week, the EU officially approved a plan to use interest from frozen Russian assets, which is estimated to generate up to €3 billion annually for Ukraine.
The Gaze reported that the French government has also supported the US proposal to use funds from frozen Russian assets for Ukraine’s benefit. French Finance Minister Bruno Le Maire, speaking ahead of the G7 meeting in Stresa, Italy, stated that Paris is open to using the income from Russian assets "in the best way and as quickly as possible within the framework of international law."
Le Maire also mentioned that he had previously warned the US authorities that full confiscation of the assets would contravene international law and the rules of the global financial system.