The leaders agreed to provide at least a $50 billion loan to Ukraine, backed by profits from frozen Russian assets.
European Council President Charles Michel, German Chancellor Olaf Scholz, Canadian Prime Minister Justin Trudeau, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, U.S. President Joe Biden, Japanese Prime Minister Fumio Kishida, British Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen pose for a family photo during a welcome ceremony on day one of the 50th G7 summit at Borgo Egnazia on June 13, 2024 in Fasano, Italy. (Photo by Antonio Masiello/Getty Images)
By Emel Akan and T.J. Muscaro
PUGLIA, Italy—Group of Seven (G7) leaders reached an agreement on June 13 to utilize frozen Russian assets in their continued support of the war in Ukraine.
The G7 will provide Ukraine with a loan using frozen Russian assets as collateral. The total sum is unclear at this time, but the United States has committed $50 billion alone. The risk will be shared among the other G7 nations.
Senior Biden administration officials told reporters that the loan will begin this year, and emphasized that this effectively makes Russia pay for the loan rather than the taxpayers in the United States and G7 countries.
“Russia pays,” said one senior administration official. “The income comes from the interest stream on the immobilized assets, and that’s the only fair way to be repaid. The principle is untouched for now. But we have full optionality to seize the principal later if the political will is there.”
Ukrainian President Volodymyr Zelenskyy, in a post on X, had expressed hope that the asset deal would be finalized Thursday.
“The entire Ukrainian people, including our warriors, see that the G7 will always support Ukraine,” he wrote. “I am grateful to our partners for their belief in us and our victory.”
In the run-up to the crucial summit, the G7 finance ministers held discussions about the legality of using some $300 billion worth of frozen assets kept in European accounts as collateral for providing a loan to Ukraine for reconstruction. France was believed to be the main holdout on the plan.
President Biden mentioned before leaving France last week that he had reached an agreement with Mr. Macron on a plan to use the frozen Russian assets.
Concerns lingered over the payout of the loan and whether or not Russian assets would remain immobilized, especially considering the European Union’s need to renew the sanctions every six months to do so.
The senior administration official clarified that the payout of the loan would be dependent on “the pace at which Ukraine can absorb the money effectively.”
He also exuded confidence in European leaders’ commitment to maintain the sanctions.
“When you have commitment at the highest political levels, you know, that is what gives us confidence that these assets are going to remain immobilized,” he said. “The income will continue to flow, and we will be repaid either from the income itself or through reparations with Russia.”
The senior administration official also said that the funds would be used in multiple ways in Ukraine, including humanitarian support and reconstruction support. However, he also said that there were “certain jurisdictions” that preferred to have their money earmarked for military support.
The agreement was reached a day after the United States announced expanded sanctions on more than 300 entities and individuals designed to “ratchet up the risks that foreign financial institutions take by dealing with Russia’s war economy,” according to national security adviser Jake Sullivan.
Following his meetings with G7 leaders on June 13, President Biden will sign a 10-year bilateral security agreement with Mr. Zelenskyy, signifying a continuing U.S. commitment to support the war-torn country against Russian aggression.
This is the 50th summit meeting of the leaders of the United States, Japan, Germany, the UK, France, Italy, and Canada—the seven most advanced economies in the world—and, along with the war in Ukraine and Russian assets, discussions are also expected to cover the war in Gaza, economic security, AI, migration, climate change, and food security.
Emel Akan is a senior White House correspondent for The Epoch Times, where she covers the Biden administration. Prior to this role, she covered the economic policies of the Trump administration. Previously, she worked in the financial sector as an investment banker at JPMorgan. She graduated with a master’s degree in business administration from Georgetown University.