Friday, June 14, 2024

How G7, EU plan to leverage frozen Russian assets for Ukraine

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The Group of Seven countries and the European Union are considering how to use profits generated by Russian assets immobilised in the West to provide Ukraine with a large up-front loan now and secure Kyiv’s financing for 2025.

Around €260 billion ($283 billion) of Russian central bank funds are frozen worldwide, most of it in the EU. The funds generate €2.5 billion to €3.5 billion a year in profit, which the EU says is not contractually owed to Russia and therefore represents a windfall. The idea, championed by the United States, is to use this profit as a steady revenue stream to service a large loan of $50 billion that could be raised on the market. Russia says any diversion of the profits from its frozen funds would amount to theft.

Senior European officials say an agreement to go ahead with such a loan at a June 13 to 15 summit of the G7 — the U.S., Canada, Japan, Britain, France, Germany and Italy — would send a powerful signal of unity behind Kyiv on the eve of an international conference on Ukraine in Switzerland. It would also ensure Kyiv has financing for all of 2025 no matter who wins the U.S. presidential election on Nov. 5.

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