The G7 countries are going to agree to allocate a loan to Ukraine in the amount of 50 billion dollars secured by profits from the frozen assets of the Russian Federation.
Points of attention
- 1. Approval of the allocation of credit to Ukraine at the G7 summit is expected.
- 2. An attempt to use the frozen assets of the Russian Federation to provide a loan to Ukraine.
- 3. Potential risks for partners in case of non-fulfillment of lending conditions.
- 4. Prospects for the implementation of the plan to provide financial assistance to Ukraine.
- 5. Experts consider the unblocking of frozen assets as a strategic change.
When can the decision to allocate a $50 billion loan to Ukraine be approved?
According to the publication's journalists, the decision is expected to be approved at the G7 summit in Italy.
However, analysts note that even if this decision is approved, it will be only the first step in the reconstruction of the country destroyed by the criminal army of the Russian Federation.
At the same time, the authors of the material point out that the summit of the leaders of the Big Seven will take place at a very important moment for US President Joe Biden, who is scheduled to go to Italy on June 12.
In particular, Biden must convince partners that the US plans to continue to provide strong support to Ukraine, regardless of the results of the November presidential elections.
Now that the war has reached a critical juncture, G7 leaders appear poised to end months of discussions over how to use $300 billion in frozen Russian central bank assets, mostly held in European financial institutions. The idea is to ensure the infusion of economic aid to Ukraine, the publication emphasizes.
Journalists add that after lengthy disputes, the White House insisted on the total seizure of frozen Russian assets, but the EU countries opposed it.
The EU has agreed to use interest earned on central bank assets where they are held to provide Ukraine with around €3 billion annually.
However, the White House sought to allocate significantly more funds to Ukraine at the expense of the Russian Federation's frozen assets, so it developed a plan to use them to secure a loan that could be granted immediately.
What are the risks faced by partners in the framework of the credit allocation to Ukraine?
In recent weeks, the finance ministers of the most influential countries in the world have been trying to determine precisely how the money will be transferred to Ukraine and are discussing the possibility of transferring it through an institution such as the World Bank.
However, it is currently unclear how exactly this loan will be paid.
If the war ends before the bonds mature or if interest rates fall, the proceeds from the assets will be insufficient to repay the loan, the authors of the material warn.
White House National Security Council spokesman John Kirby said the summit is expected to show "unanimity" in working on a plan to use frozen assets to help Ukraine rebuild after the war.
Evelyn Farkas, executive director of the McCain Institute at Arizona State University and a former deputy assistant secretary of defence, said unlocking the frozen assets would be a "game changer."
