G7 leaders on Thursday agreed on a new US$50 billion loan for Ukraine using profits from frozen Russian assets, a move US President Joe Biden said showed Moscow “we’re not backing down.”
The US president and other G7 leaders agreed at a summit in Italy to use the profits from the interest on the assets to back the loan to provide help to Kyiv as it struggles in its third year of war with Russia.
Summit host Italian Prime Minister Giorgia Meloni announced the “political agreement” after the first day of talks in Puglia, saying it was a hard-fought, but “fundamental” step.
Photo: AFP
Meloni invited Ukrainian President Volodymyr Zelenskiy to join a special session on the Ukraine war alongside the leaders of Germany, France, Canada, Japan and the UK.
At a joint news conference with the Ukrainian leader afterward, Biden said the deal emphasized to Russian President Vladimir Putin the long-term commitment of Kyiv’s allies.
With it, the G7 leaders “collectively show Putin he cannot wait us out, he cannot divide us,” he said.
Earlier at the Borgo Egnazia resort, Zelenskiy said the loan was a “vital step forward in providing sustainable support for Ukraine in winning this war.”
He said it would go toward “both defense and reconstruction.”
However, he said Ukrainian forces still need more air-defense systems to help counter attacks by Moscow, which has been pummeling Kyiv’s frontline troops and the nation’s power grid.
The EU earlier this year agreed to help Kyiv by using the profits from the interest on Russian central bank assets frozen by Western allies — the majority of them held in the bloc — but Washington had been pushing for more and faster help through a huge upfront loan.
A senior Biden administration official said the US was willing to provide up to US$50 billion, but said its contribution could be “significantly less,” as it would be a shared initiative.
“We will not be the only lenders. This will be a loan syndicate. We’re going to share the risk, because we have a shared commitment to get this done,” the official said on condition of anonymity.
He would not say how much other G7 nations would contribute, nor did any other leaders.
G7 nations, which count the EU as their unofficial eighth member, have been Ukraine’s key military and financial backers since Russia invaded in February 2022.
The G7 and the EU have frozen about 300 billion euros (US$323 billion) of Russian assets, much of it frozen by Euroclear, an international deposit organization based in Belgium.
EU nations say they could generate 2.5 billion to 3.0 billion euros a year for Kyiv from the profits on the interest.
German Chancellor Olaf Scholz hailed the loan agreement as a “historic step” and a “clear signal to the Russian president that he cannot simply sit this matter out.”
“The basis has been created for Ukraine to be in a position to procure everything it needs ... in the near future, in terms of weapons, but also in terms of investment in reconstruction or in energy infrastructure,” he said.
Zelenskiy has been engaged in a flurry of diplomacy aimed at shoring up international support, from a reconstruction conference in Berlin earlier this week to a peace conference in Switzerland this weekend.
In Puglia on Thursday, he also signed what he called a “historic” 10-year security deal with Biden, and another with Japan.
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