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G7 leaders agree $50bn loan plan for Ukraine, officials say
G7 leaders agree $50bn loan plan for Ukraine, officials say
The G7 (Group of Seven) is an organisation of the world’s seven largest so-called “advanced” economies, which dominate global trade and the international financial system.
They are Canada, France, Germany, Italy, Japan, the UK and the United States.
The EU is not a member of the G7, but attends the annual summits.
Throughout the year, G7 ministers and officials hold meetings, form agreements and publish joint statements on global events.
How does the plan to fund Ukraine work?published at 17:49
James Landale
Diplomatic correspondent, in Puglia
Essentially, world leaders have an idea to make more cash for Ukraine by using all the Russian assets that were frozen when the country invaded Ukraine – it’s about $300bn in all.
Officials have decided they can’t go full hog and take the whole thing, because of the financial ramifications of that.
But this pot is generating a lot of interest – about $3bn a year – so their idea is to use that interest to fund Ukrainian defence.
The idea is to take out a loan on the international markets, give about $50bn to the Ukrainians each year, and use the $3bn to pay off the interest on that loan each year.
It sounds relatively straightforward, but it’s hugely complicated. There are still lots of technicalities to sort out.
Using revenue from frozen Russian assets to help Ukraine: it’s been described in the West as a “creative approach” to assisting Kyiv.
Russia has a different word for it: “theft.”
“It’s criminal, cynical and another blow to international law,” said Maria Zakharova, Russian foreign ministry spokesperson at a press briefing.
So how will Russia respond?
“There are enough European assets and funds in Russia,” Zakahrova added. “Our measures in response, which are inevitable, will be extremely painful for Brussels. They will have to pay for their madness from their own wallet.”
Last month President Putin signed a decree allowing Russia to confiscate the assets of American companies and individuals as compensation for any Russian assets confiscated in the United States.
There is an irony here. Russia, the country which launched a full-scale invasion of its neighbour, a sovereign independent state, is now complaining about “violations of international law”.
Will the multi-billion dollar G7 aid fund for Ukraine force a Russian U-turn on its war in Ukraine? Almost certainly not.
What it will do is send a clear message to Moscow that, for now, Ukraine’s allies are determined to support the country.
Plans to fund Ukraine, reportedly with $50b raised from frozen Russian assets, have been approved by G7 nations, according to officials.
German Chancellor Olaf Scholz said more financial support for Ukraine was coming and told reporters at the G7 Summit that Russian President Vladimir Putin’s plan to wait for international support for Ukraine to end had failed.
