The leaders of the G7 finance ministries are going to discuss the possibility of using the proceeds of frozen Russian sovereign assets to support a $50 billion loan to Ukraine. These discussions will take place on the sidelines of a meeting of G20 financial leaders dedicated to economic, climate and development issues. This was reported by Reuters, according to UNN .
Details
A senior U.S. Treasury official said that the meeting is unlikely to result in an agreement or statement, but it is important that the Treasury ministers consider the technical aspects of the plan to lend to Ukraine in detail. Meanwhile, ambassadors of EU member states are discussing possible options to meet US demands for a long-term asset freeze.
In June, the G7 leaders agreed in principle to use the proceeds of about $300 billion in frozen Russian assets to secure a $50 billion loan to Ukraine. The plan does not involve asset confiscation, which could destabilize the global financial system, as the EU has argued. However, the details of the plan turned out to be more complicated than expected.
The U.S. is seeking assurances that the assets will remain frozen for an extended period, at least until a peace treaty is signed that ends the war while preserving Ukraine's sovereignty and providing for compensation from Russia for damages caused by the war. This is somewhat at odds with the EU sanctions regime against Russia, which requires renewal every six months, leaving open the possibility of unfreezing assets.
“We've been very clear with our counterparts that we need firm assurances that the assets will not be unfrozen without a peace agreement in which Russia will pay for the damage,” said the US Treasury official. “From our perspective, something that makes that very clear would give us confidence that this loan can be made.”
The official did not specify how such guarantees could be achieved, but emphasized that the G7 leaders had decided to implement the lending plan.
The draft EU document indicates that ambassadors of member states are discussing options for extending the renewal period of sanctions, in particular on the assets of the Central Bank of Russia, to ensure the implementation of the lending plan. The options include an “indefinite” extension of the renewal period or its extension to three years. In any case, unanimity among EU member states is required.
The draft states that the extension is intended to “increase legal certainty and predictability for G7 partners regarding the extraordinary revenues that will be available to Ukraine to service and repay additional bilateral loans from the EU and G7 partners.