G7 agrees deal to use US$50 billion from Russian assets for Ukraine, seeks to counter China

The plan involves a US$50 billion loan to help Ukraine fight Russia using the interest earned on profits from Moscow’s frozen assets

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From left:French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni and US President Joe Biden attend a round table meeting at the G7 summit in Borgo Egnazia, Italy on Thursday. Photo: EPA-EFE

Published: 8:30pm, 13 Jun 2024Updated: 12:42am, 14 Jun 2024

Leaders of the Group of Seven major democracies (G7) started their annual summit on Thursday, many of them under a cloud at home but determined to make a difference on the world stage as they seek to help Ukraine and counter China’s economic ambitions.

Heading into two days of talks, diplomats said a deal had been agreed to issue US$50 billion of loans for Ukraine backed by proceeds from immobilised Russian assets, European Commission President Ursula von der Leyen said on Thursday.

“All G7 are contributing to this loan. It is the windfall profits from the Russian immobilised assets in Europe that will serve it,” von der Leyen told reporters on the sidelines of a G7 summit in southern Italy that agreed the plan.

“The finance ministers are now going through the details – for example, the topic of backstops that are necessary – and [will)] clarify this as soon as possible.”

European Commission President Ursula von der Leyen on the first day of the G7 summit in Savelletri, Italy on Thursday. Photo: Reuters

The loan would be secured against the future profits from interest on US$325 billion of Russian central bank assets frozen by Western allies.