To help Ukraine fight invading Russian forces, the G7 has decided to raise $50 billion (£39 billion) using frozen Russian assets.
US President Joe Biden remarked it was another reminder to Russia “that we’re not backing down”; in Moscow, President Vladimir Putin claimed the action was “theft” that would “not go unpunished.”.
At the G7 summit in Italy, President Volodymyr Zelensky of Ukraine and Biden signed a 10-year bilateral security agreement that Kyiv hailed as “historic.”
The agreement promises US military and training support to Ukraine; it does not commit Washington to sending troops to fight for its ally.
The White House claims that the security agreement will help Washington and Kyiv support economic recovery and energy security, strengthen the nation’s defense industrial base, and enable the building and maintenance of Ukraine’s defense and deterrence capability.
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The security agreement also means that should a future Russian armed attack against Ukraine come to pass, there will be consultation “at the highest levels to determine appropriate and necessary measures to support Ukraine and impose costs on Russia”. Along with the EU, the G7 froze some $325 billion worth of assets separately following Russia’s full-scale invasion of
Ukraine in 2022. Interest from the pot of assets brings about $3 billion annually. That $3 billion will be used under the G7 scheme to pay off the yearly interest on the $50 billion loan taken out for the Ukrainians on international markets.
Though it is considered as a longer-term solution to assist Ukraine’s war effort and economy, the money is not expected to arrive until the end of the year.
As per BBC, speaking at a joint news conference in Puglia, southern Italy, President Biden remarked that the $50 billion loan would “put that money to work for Ukraine and send another reminder to [Russian President Vladimir] Putin that we’re not backing down”.
Telling that Putin “cannot wait us out, he cannot divide us, and we’ll be with Ukraine until they prevail in this war”.
President Zelensky praised his Americans and other friends for their relentless support.
Turning then to the new security agreement, he remarked, “It’s a truly historic day and we have signed the strongest agreement within Ukraine and the US since our independence [in 1991].”
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As Ukraine fights to contain occupying Russian forces, the G7 group of wealthy countries—Canada, France, Germany, Italy, Japan, the UK and the US—have been significant military and financial supporters of Ukraine.
Other G7 ministers also praised the $50 billion loan agreement; UK Prime Minister Rishi Sunak called it “game changing”.
When weighed against the $61 billion worth of US military aid finally approved in May, the $50 billion loan is a small pot of money.
According to a top White House official, the G7-agreed fund will have “multiple” uses ranging from “military support, budget support, humanitarian support, reconstruction support”.
The US official said, “flexibility in this structure,” since some nations would have funds “earmarked” for military support while others would want to send their money to budget support and reconstruction.
