The US is ready to lead a loan of $50bn to Ukraine repaid by profits from frozen Russian assets if the EU can indefinitely extend sanctions against Moscow, according to a leaked discussion paper, reports The Financial Times, writes UNN.
Details
Washington, as noted, needs the EU to extend the bloc's sanctions on Russian state assets, which expire every six months until they are extended by unanimous agreement, until the end of the war, to ensure that the United States does not remain "on the hook" for payments.
But any such change to the EU's rehabilitation regime, the publication points out, will require the approval of leaders, including Hungarian Prime Minister Viktor Orban, who "zealously guarded his regular right to veto decisions on sanctions.
The US proposal is reportedly set out in an EU discussion document prepared for a virtual meeting of the bloc's finance ministers on Wednesday to discuss how to raise money for Ukraine in advance.
Washington, the newspaper writes, insists on a deal ahead of the G7 leaders ' summit in Italy next week, where a funding mechanism backed by profits from frozen assets is expected to become a central element of support for Ukraine.
The main analyzed option, as indicated, is the US plan to lend to Ukraine, possibly in tandem with other G7 countries, which roughly corresponds to the estimated "unforeseen profits" from hundreds of billions of dollars of frozen Russian assets stored in the West. Diplomats say it could raise up to.50 billion.
The exact details of the loan, including its maturity, interest rate, and whether it will be granted directly or through an intermediary such as the World Bank, have yet to be determined, according to the document.
But Washington sees any such loan as " conditioned "by the EU distributing profits from assets for repayment and ensuring that" the assets of the Russian central bank held in the EU will remain immobilized until Russia agrees to pay the losses caused to Ukraine, " the document said.
Such a promise, the publication points out, is crucial, since the main part of Russian assets is held in the Belgian Central Securities Depository Euroclear, which generates approximately 3 billion euros in profit per year.
If the profits are less than the required payments, or if Ye is unable to agree on an extension of sanctions, the United States could potentially bear responsibility. The United States is discussing other potential options for sharing this risk with other partners from the group of seven, the newspaper writes.
Some EU governments fear the potential financial consequences of such safeguards. "The Americans will probably have to accept that the EU cannot provide an ironclad guarantee (for) losses," said a person informed of the talks.
Another option under consideration assumes that Ein-along with other group of seven countries - will actually issue bilateral loans to Ukraine, backed up by profits from Russian assets frozen in their own jurisdiction.
This would potentially require the EU to use "stocks" within its common budget - a move that would also require unanimous consent. "The time required to implement such guarantees, together with legal and operational restrictions, will not contribute to the rapid implementation of this option," the document says.
"Tomorrow you will get an understanding from EU ministers of whether they are ready to work in this direction," said a person who participated in the negotiations.
"People are discussing all the details, but we are approaching the moment when people are ready to say,' OK, this makes sense, ' "the source said.
Addition
Pressure to use assets has increased in recent months as Washington seeks to maximize financial assistance to Ukraine with an eye on the November presidential election. Although France, Germany and Italy are separate members of the G7, the EU's decisions require consensus among its 27 members.