Borgo Ignazia, Italy —
The Group of Seven Wealthy Democracies announced on Thursday that it would provide tens of billions of dollars in loans to Kiev and repay the Western allies using interest income from Russian assets frozen in Western financial institutions.
“We have reached a political agreement to provide Ukraine with approximately $50 billion in additional financial support by the end of the year,” Italian Prime Minister Giorgia Meloni, the summit’s organizer, said in a statement.
The announcement was made as G7 leaders met on the first day of the summit at Borgo Egnazia, a luxury resort in Puglia, Italy.
The announcement marked a victory for US President Joe Biden. He had urged G7 leaders to agree to his plan to provide up-front funding to help Ukraine fight Moscow’s aggression.
Biden said at a joint news conference with Ukrainian President Volodymyr Zelenskiy on Thursday night that the G7 agreement is “another reminder to (Russian President Vladimir) Putin that we will not back down.” “In fact, we stand united against his illegal aggression.”
Approximately $280 billion of Russian funds are frozen in Western financial institutions. These funds are expected to generate at least $3 billion in interest income annually. The $50 billion loan will be repaid with proceeds over 10 years, or until the loan is paid off or Russia pays reparations.
The United States will not participate in “loan syndications” with other G7 countries, a senior administration official told reporters Thursday while traveling with Biden.
Other G7 countries are also expected to announce how much aid they intend to give to Ukraine.
European Commission President Ursula von der Leyen said: “Finance ministers are currently considering the details, including the necessary backstop agenda, and will clarify this as soon as possible.” The EC is the executive arm of the European Union.
Funds available in 2024
Administration officials said the United States was prepared to cover the full $50 billion if necessary. The funds could be made available “later this year,” depending on how quickly Ukraine can absorb them.
The U.S. Agency for International Development “has already established lending authority from Congress,” an official told VOA at a press conference, “but it has been determined that the loan can be made up to a maximum, although no schedule or maximum amount is required.” ” he said. 50 billion dollars. ”
In May, the European Union agreed to a less aggressive plan to provide Ukraine with annual interest income.
Under EU rules, the sanctions regime that freezes funds must be renewed unanimously by the EU’s 27 member states every six months. A senior Biden administration official said Germany, France, Italy, the European Commission and the president of the European Council had committed to continuing the freeze and would seek approval from full EU member states. . .
“This is controversial and I don’t know if they can do it,” said Kristin Bergina, managing director of GeoStrategy North at think tank German Marshall Fund.
“But the EU is about to take a giant leap of faith. European countries need to project ambition that counteracts perceptions of internal discord and can make concessions to individual member states if necessary,” she said. said.
The official added that other requirements still need to be considered, including adoption by the EU and contracts with lenders, Ukraine and intermediaries.
Biden signed a bill in April that would seize about $5 billion in Russian assets frozen in U.S. financial institutions. The bulk of the frozen funds, $190 billion, are in Belgium, with much of the rest in France and Germany.
There are still many unknowns about this plan. But the U.S. goal is to issue a leaders’ declaration at the end of the summit that provides “a framework that is not comprehensive, but very specific in terms of what it entails,” White House National Security Adviser Jake said. Sullivan told VOA. Wednesday.
President Zelensky of Ukraine attended the summit for the second consecutive year and welcomed the agreement.
US-Ukraine security agreement
On Thursday night, Zelensky and Biden signed another bilateral security agreement outlining U.S. support for Ukraine.
White officials said the 10-year agreement calls for the two countries to build and maintain Ukraine’s credible defense and deterrence capabilities, strengthen Ukraine’s ability to continue fighting over the long term, and respect Ukraine’s rights under international law. We are committed to working together to achieve a just peace. House fact sheet.
The agreement also states that both sides will consult at the highest level in case of a future Russian attack, and that “Ukraine’s democratic, economic, and security system will be reformed in line with the EU, including “We will accelerate Euro-Atlantic integration.” membership goals and NATO reform programs. ”
Still, President Zelenskiy expressed concern about how long “the unity of the world, the unity of European leaders and the United States,” will last. He was referring to the US presidential election in November, when former President Donald Trump, who is skeptical about supporting Kiev with military aid, could return to the White House.
President Zelenskyy said additional air defense systems are urgently needed to protect Ukrainians and the country’s infrastructure from Russian attacks. Biden has pledged to prioritize the transfer of existing Patriot air defense systems to Ukraine.
“We have so far received commitments from five countries for Patriot batteries and other air defense systems, and we have communicated this to other countries that are looking to us for air defense systems in the future. We just have to wait.” said Mr. Biden. “Everything we have will be sent to Ukraine until their needs are met, and then we will fulfill our commitments to other countries.”
