G7 set to announce new Ukraine loan agreement

    WORLD  13 June 2024 - 19:13

    Leaders representing the Group of Seven nations are set to announce as soon as June 13 an agreement to loan money to Ukraine backed by the profits from frozen Russian investments, CNN reports citing the sources familiar with the discussions.

    The loan is set to provide a new source of revenue to a war-torn nation facing a steep and costly road to recovery.

    Negotiators had focused discussions on a loan amount of roughly $50 billion, a figure that would represent the annual proceeds on the investments – which generate a profit of about 3 billion euros per year – over the course of 10 years. The loan is expected to be delivered by the end of 2024, which would ensure the money would get to Ukraine before a potential change in US presidents. President Joe Biden is facing off against former President Donald Trump in November’s US presidential election and Trump has refused to commit to sending additional funding to Ukraine.

    Western nations froze Russia’s assets in bank accounts located within Europe and the US as part of a massive wave of sanctions enacted after Vladimir Putin ordered the invasion of Ukraine in 2022. Hundreds of billions of assets are frozen in Europe, with just a small amount – roughly $3 billion – located in banks in the US.

    That led European officials to raise concerns that they could be on the hook if Ukraine failed to pay back the loan, the investments generated less profit, or the assets get delivered back to Russia as part of a peace deal.

    A senior US official says negotiators, who have continued working out final details in Brindisi, Italy, ahead of the G7 leaders’ arrival, have structured the deal so that all countries participating share the risk.

    “This loan will mostly be provided by the United States and will be supplemented by money from Europe,” an Élysée source told journalists at a briefing.

    “Countries are still discussing how to partition the cost if the profits from Russian assets are not sufficient to cover the need,” the French source added.

    The source spoke on the condition of anonymity, citing professional norms in Europe.

    The United States has provided $175 billion to Ukraine since Russia’s invasion, a total that now surpasses the $171 billion in 2024 dollars that the US provided to the Marshall Plan to rebuild Europe after World War II. The European Union has delivered $107 billion in aid.

    The World Bank estimates that Ukraine would need more than $500 billion to rebuild, a figure that climbs each day the war continues.

    “The $50 billion will be transferred before the end of 2024,” the source said.

    Caliber.Az

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