Ukraine’s supporters have agreed to move forward with a $50 billion loan to Kyiv, financed by profits from frozen Russian assets in Europe and the U.S., the leaders of the Group of Seven (G7) countries announced Thursday.
The agreement marks a significant achievement for President Biden, with the U.S. spearheading the effort to get the broad grouping of Ukraine’s supporters to agree on seizing Russian assets to support Kyiv and counter Russian President Vladimir Putin.
“I’m very pleased to share that this week … the G7 signed a plan to finalize and unlock $50 billion from the proceeds of those frozen assets, to put that money to work for Ukraine and other reminders to Putin, we’re not backing down. In fact, we’re standing together against this illegal aggression,” Biden said Thursday at a press conference alongside Ukrainian President Volodymyr Zelensky.
“Thank you Mr. President for your leadership in the G7’s decision on $50 billion loan for Ukraine; it’s a vital step forward in providing sustainable support for Ukraine in winning this war,” Zelensky said.
“Russian immobilized assets should be used for defending Ukrainian lives from Russian terror and for repaying the damage the aggressor caused to Ukraine. It’s fair and absolutely right.”
The proposal was led by the U.S. and agreed on during the first day of the G7 summit in Italy.
G7 members froze about $280 billion in Russian assets after the invasion began in February 2022, and the proposal would use the interest generated on the frozen assets, which is about $2.6 billion to $3.6 billion a year, to pay back a $50 billion loan to provide to Ukraine immediately.
“This has been something that the United States has put a lot of energy and effort into,” national security adviser Jake Sullivan said in a briefing with reporters Thursday morning ahead of the day’s events.
“We see proceeds from these assets as being a valuable source of resources for Ukraine at a moment when Russia continues to brutalize the country, not just through military action on the front end, but through the attempted destruction of its energy grid and its economic vitality.”
The commitment from G7 countries comes as Russia’s more than two-year illegal war against Ukraine is straining unity among Kyiv’s military and financial backers.
That has translated into battlefield losses for Ukraine without adequate military resupplies, though Ukraine was able to largely push back Russia’s latest offensive around the city of Kharkiv.
Last week, in a meeting with Zelensky on the sidelines of the 80th anniversary of D-Day, the president apologized for the seven-month delay in getting a billion-dollar aid package passed in Congress.
And countries supporting Ukraine are under further pressure to lay the groundwork for long-term commitments amid shifting domestic political trends.
There’s concern among Ukraine and its supporters that former President Trump, the presumptive Republican presidential nominee, would pull back U.S. commitments for Kyiv or NATO — and that it would benefit Putin.
And while far-right parties demonstrated a strong showing in European Union parliamentary elections, analysts say that there’s not a major threat to European support for Kyiv in the short-term.
In particular, they point to Italian Prime Minister Giorgia Meloni, the G7 host who, despite being described as right-wing, has come out as a strong supporter for Ukraine and critic of Russia. Her party demonstrated a strong return in the EU elections.
The agreement to use profits from frozen Russian assets is an important stopgap measure amid ongoing debates and disagreements over whether the frozen assets should be seized entirely. So far, each country is working out its own legal justifications for such a move.
In April, Biden signed into law the REPO Act, part of the national security supplemental package, that allows the U.S. to seize frozen Russian assets for Ukraine’s reconstruction.
Estonia similarly passed its own version of such a bill in May.
“I think it is very critical, first, to support Ukraine with financial resources, it’s evident that it’s needed, also for the rebuilding effort and keeping the Ukrainian state going,” Estonia’s ambassador to NATO, Jüri Luik, said in an interview with The Hill in Washington last week.
“It’s also a very important kind of punishment for the Russian regime because it’s a corrupt regime — they love power but they also love money, so I think this would also be a very good move, in that direction.”