G7 leaders reached an agreement to utilize frozen Russian assets as collateral for a $50 billion loan to Ukraine, with the Biden administration emphasizing that Russia will bear the repayment responsibility.
Leaders of the Group of Seven (G7) met in Italy on Thursday and decided to provide Ukraine with a loan secured by assets that Russia had frozen. Furthermore, the Biden administration has promised $50 billion in total, albeit the exact amount is yet unknown.
Senior officials in the Biden administration claim that the loan will go into effect later this year and that Russia will be forced to repay it rather than US taxpayers or the G7 nations.
“Russia pays,” an official declared. “The income comes from the interest stream on the immobilized assets, and thatās the only fair way to be repaid. The principle is untouched for now. But we have full optionality to seize the principal later if the political will is there.”
Volodymyr Zelensky, the president of Ukraine, expressed his gratitude to their “partners” for their support in a post on X.
The Epoch Times further reports that the G7 finance ministers debated whether it was legal to use $300 billion in frozen assets held in European accounts as collateral for a loan to Ukraine for reconstruction prior to the pivotal conference. It was thought that France was the primary opponent to the idea.
Before departing France last week, President Biden stated that he and Mr. Macron had decided how to use the Russian assets that were placed under lockdown.
The senior administration official responded, “What’s the alternative” if Ukraine was not adequately financed when asked how the United States overcame reservations regarding the use of state assets.
āWhat would be the chilling effect it would cause across Europe and the rest of the world,ā he asked. āWhat would be the signal to autocrats that they can redraw borders by force? Those are the costs, I think, we all agreed are unacceptable, and thatās why we acted.ā
The senior administration official added that the money would be used in Ukraine for both reconstruction and humanitarian assistance. He did, however, add that there were “certain jurisdictions” that would rather have their funds designated for military assistance.
According to national security adviser Jake Sullivan, the agreement was made the day after the US announced increased sanctions on over 300 organizations and people to “ratchet up the risks that foreign financial institutions take by dealing with Russia’s war economy.”
President Biden will sign a 10-year bilateral security pact with Mr. Zelenskyy after his talks with G7 leaders on June 13. This deal will demonstrate the United States’ ongoing commitment to assisting the war-torn nation in fending off Russian invasion.
The leaders of the seven most developed economies in the worldāthe US, Japan, Germany, the UK, France, Italy, and Canadaāare gathering for their 50th summit meeting. Topics of discussion are expected to include the war in Gaza, economic security, artificial intelligence, migration, climate change, and food security, in addition to the conflict in Ukraine and Russian assets.
Recently, GreatGameIndia reported that Russian President Vladimir Putin issued a decree on Thursday enabling the government to confiscate American assets in Russia, including real estate and belongings, in response to potential US seizures of Russian assets.
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