At the G7 summit in Borgo Egnazia, Italy, a senior U.S. official disclosed on Thursday that the United States and European nations have agreed to freeze sanctioned Russian assets until Moscow compensates for its invasion of Ukraine. This agreement paves the way for the announcement of a $50 billion loan package for Kyiv, to be made during the summit where President Joe Biden is expected to sign a security agreement with Ukraine’s Volodymyr Zelenskyy.
The agreement, eagerly anticipated, will utilize interest and income generated from over $260 billion worth of frozen Russian assets, primarily held in Europe, to secure the $50 billion loan from the U.S. and additional loans from other partners. Although the initial disbursements are scheduled for this year, it will require time for Ukraine to utilize all the funds, the official noted. Speaking anonymously to preview the agreement, the official mentioned that it will be incorporated into the G7 leaders’ communique on Friday. The funds allocated to Ukraine can be utilized across various sectors, including military, economic, humanitarian needs, and reconstruction.
Additionally, the leaders’ statement will keep the option open for the complete confiscation of Russian assets, a move for which the allies are yet to garner sufficient political support, largely due to concerns regarding legal and financial stability.
