G7 leaders allocate $50bln to Ukraine from frozen Russian assets
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Leaders of the G7 have decided to give a substantial $50 billion "in loans" to Ukraine, utilizing profits from Russia's frozen assets.
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Leaders of the Group of Seven nations attend a session with other guest countries including Ukraine's Volodymyr Zelensky in Hiroshima, western Japan, Sunday, May 21, 2023. (AP)
Leaders of the Group of Seven (G7) wealthy nations have reached an agreement to provide $50 billion "in loans" to Ukraine using profits from Russia's frozen assets.
In a statement, the White House announced, “Today, we, the Leaders of the Group of Seven (G7), have reached a consensus on how to deliver approximately $50 billion in Extraordinary Revenue Acceleration (ERA) loans to Ukraine.”
The funds are expected to be available by the end of the year for economic and military assistance.
Dive deeper
On Wednesday, US Treasury Secretary Janet Yellen and Ukrainian Finance Minister Serhiy Marchenko signed an agreement that includes a US loan commitment of $20 billion.
Yellen emphasized that the costs of Russia's “illegal war” will be borne by the Russians, not Western taxpayers.
The European Union, specifically France, Germany, and Italy, has committed to a separate $20 billion loan, which will be reimbursed from the Russian assets, while the remaining $10 billion will be divided among Britain, Canada, and Japan.
Repayment of these loans will come from "earnings" generated by over $300 billion in Russian deposits seized by Western countries since Russia's military operation in Donbass started in February 2022.
The G7 statement noted, “These loans will be serviced and repaid by future flows of extraordinary revenues stemming from the immobilization of Russian Sovereign Assets.”
The G7 finance ministers added, “Our aim is to begin disbursing the funds by the end of the year,” affirming, “We will stand by Ukraine for as long as it takes.”
Why it matters
The United States announced plans to provide Kiev with a $20 billion loan in December, strategically timing the announcement to protect the funds from potential cancellation if Republican candidate Donald Trump were to win the 2024 presidential election against Democratic candidate Kamala Harris. The new president will assume office in January 2025, with Trump pledging to “get out” of the US-led war in Ukraine.
Despite repeated warnings from Russian officials that backing Kiev would only extend the conflict, US-led Western nations continue to offer substantial diplomatic and financial support, including significant shipments of arms and munitions to Ukrainian forces.
Ukraine incursion in Kursk struggles as Russians retake territory: WP
A report by The Washington Post (WP) said, "As President Volodymyr Zelensky traveled through Europe and the United States to promote his “victory plan” aimed at resolving the war with Russia, Ukrainian forces encountered significant setbacks on the battlefield."
Analysts indicated that Russian forces may have retrieved up to half of the territory that Kiev originally seized during its summer offensive into Russia’s Kursk region. According to WP, this concerning shift calls into question the effectiveness of Ukraine’s military strategy amid the ongoing conflict.
The incursion into Russia was initially celebrated by Ukrainian officials as a success, however, recent Russian counterattacks in the Kursk region have raised concerns about how long Kiev can maintain control over the territory.
The Institute for the Study of War, which has been closely monitoring the conflict, reported visual evidence indicating that Russian forces have regained control of 46% of the territories in the Kursk region.
The Washington Post stated that Ukraine’s recent losses in Kursk highlight the country’s ongoing military struggles even as talks to end the war continue, adding that Russia has steadily gained ground in Ukraine’s eastern Donetsk region and has recently made further advances in the northeastern Kharkiv region, aiming to reach the city of Kupyansk.
Kiev's territorial gains in the Kursk region were featured in Zelensky's "victory plan", with Ukrainian officials portraying the incursion as a potentially significant leverage point in future peace negotiations, however, Russia’s recent advances are reframing the perspective, according to the report.
“I don’t think we can talk about the large-scale Russian offensive that could push the Ukrainians out just yet,” said Franz-Stefan Gady, a Vienna-based military analyst. “I think we’re still in a shaping phase — that is, in a preliminary phase before a larger-scale assault — and the major objective of the Russian forces currently is to [weaken] Ukrainian forces with artillery and drone strikes.”
“They’re essentially just testing the weaknesses of the Ukrainian defenses, so the incursion’s still fairly limited. And I think what’s concerning is that the Ukrainians are indeed actually already in this phase of being pushed back,” he added.
