G7 and EU strategize on using frozen Russian assets to support Ukraine | Global News

The Group of Seven countries and the European Union are exploring a groundbreaking plan to utilize profits from frozen Russian assets to provide Ukraine with a substantial upfront loan and secure financing for 2025. With around 260 billion euros of Russian central bank funds immobilized globally, generating billions in profit annually, the EU sees this windfall as an opportunity to support Ukraine’s financial needs.

The proposed $50 billion loan, to be raised on the market, could be serviced using the profits from the frozen Russian assets. While the United States backs this initiative, Russia vehemently opposes any diversion of these profits, labeling it as theft. Despite the challenges, senior European officials are optimistic about reaching an agreement at the upcoming G7 summit in June, signaling unity in supporting Kyiv.

Two main options are being considered: the US borrowing the money to lend to Ukraine or the EU borrowing the funds independently. The former option, favored by most EU countries, would require Washington to raise the money while the EU guarantees the profits for repayment. On the other hand, the EU borrowing directly would involve using the windfall profits to repay bonds, with the process being more time-consuming due to parliamentary consent requirements.

The decision on how to proceed with the loan for Ukraine will have significant implications for the region’s stability and the international community’s stance on the ongoing conflict. As discussions continue, the world watches closely to see how this innovative financial strategy unfolds.