Ukraine to Get US$50 Billion From Frozen Russian Assets’ Profits
Leaders of the G7 countries, June 13, 2024. Photo: X/ Extraordinary Revenue Acceleration Loans
June 13, 2024 Hour: 1:55 pm
The U.S. will be the largest contributor to the fund called ‘Extraordinary Revenue Acceleration Loans.’
During its meeting in Italy on Thursday, the Group of Seven (G7) agreed to grant Ukraine a loan of US$50 billion which will be repaid with interest generated by the assets of the Russian Central Bank frozen in the European Union (EU).
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This agreement had been reached after resolving thorny details related to issues such as who would provide the funds. In this regard, the United States will be the largest contributor to the loan to Ukraine, although it has opened the door for other G7 partners or other allied countries to join the fund called “Extraordinary Revenue Acceleration (ERA) loans for Ukraine.”
Another point of contention prior to the agreement related to who would be ultimately responsible for the loan in the event that the Ukrainian war ends without Russian assets having generated enough interest to repay the loan.
G7 leaders pledged that Russia’s assets will remain frozen until the Kremlin pays for damages caused in Ukraine, which the World Bank estimates at over 450 billion euros.
That way, there are two options: either Russia pays for the damage caused when the war is over, or the assets will remain frozen until they generate enough profits to pay for the loan.
The political reality, however, is more complicated because the 27 countries of the European Union have to vote unanimously every six months to renew sanctions against Russia.
This result might be complicated if Hungary, a nation allied with Moscow within the European bloc, could vote against the renewal of sanctions, which would imply a unfreezing of assets. In any case, the United States will spend US$46 billion for Ukraine this year.
Since the start of the special military operation in Ukraine in 2022, Russian assets worth 260 billion euros have remained frozen in European banks generating about 3 billion euros in annual profits. This last amount, however, barely covers the financing needs of the Ukrainian Executive for one month.
The agreement reached by Canada, United States, United Kingdom, Italy, France, Germany, and Japan will be formally announced on Friday, at the end of the G7 meeting, where high representatives of the European Union are also present.
Sources: EFE – Xinhua
teleSUR/ JF
