Historic $50bn loan for Ukraine agreed upon by G7 using Russian assets M Haris

APULIA: At a summit in Italy, G7 leaders, including U.S. President Joe Biden, have committed to a $50 billion loan for Ukraine, funded by profits derived from frozen Russian assets.

This decision, announced during the summit in Puglia, underscores a collective stance against Moscow amidst the ongoing conflict with Ukraine, now in its third year.

The agreement, termed a “political agreement” by Italian Prime Minister and summit host Giorgia Meloni, came after intense negotiations. Meloni highlighted the agreement as a crucial development in supporting Ukraine’s defense and recovery efforts.

During a special session that included Ukrainian President Volodymyr Zelensky and leaders from Germany, France, Canada, Britain, and Japan, the commitment to Kyiv’s long-term support was reiterated. Biden emphasized that this move signals to Russian President Vladimir Putin that the G7’s support for Ukraine is unwavering and unified.

Zelensky, addressing the gathering at the luxurious Borgo Egnazia resort, labeled the loan as essential for Ukraine’s sustained support in the conflict. He noted the funds would be allocated towards defense enhancements and national reconstruction. However, he also mentioned an ongoing need for more air-defense systems to counteract Russian military pressures.

Earlier this year, the EU decided to assist Kyiv by channeling profits from the interest on Russian central bank assets, primarily held within the bloc. However, the U.S. has advocated for quicker and more substantial support through this significant loan.

A senior official from the Biden administration stated that while the U.S. could provide up to $50 billion, the actual U.S. contribution might be less as the initiative involves a syndicated loan, sharing risks among multiple G7 lenders.

Details on the contributions from other G7 nations were not disclosed at the summit.