G7 allies are set on US plan to freeze Russian assets for Ukraine - FT
Kyiv • UNN
The G7 allies are set on a US plan to freeze Russian assets for Ukraine even before a potential Trump presidency, the FT reports.
Washington's G7 allies are upbeat about the US plan to provide tens of billions of dollars in funding to Ukraine before Donald Trump's potential return to the White House if he wins the election, the Financial Times reports, according to UNN.
Details
"According to the plan to be discussed at the June summit, Kyiv will receive money upfront through a G7 loan. The loan will be secured by future profits generated from Russian assets worth about $350 billion, which were immobilized in the West in response to Moscow's full-scale invasion of Ukraine," the report said.
Some G7 members, the newspaper writes, citing 8 Western officials, "were reluctant to endorse the plan, but their mood changed after diplomatic pressure from the United States, which is seeking a deal at next month's Group of Seven leaders' summit.
"According to U.S. officials, this plan will generate about $50 billion, which will be transferred to Ukraine this summer," the newspaper notes.
"The more resistant G7 members enthusiastically embraced the plan as a way to secure long-term funding for Kyiv if Joe Biden loses this year's U.S. presidential election to Trump, who has opposed U.S. aid to Ukraine," the publication points out.
This can be "done by November, so even if Trump wins, the money will already be allocated," said one of the participants in the discussions, the newspaper writes.
As noted, officials from Italy, which holds the G7 presidency, said that the summit will seek to reach a consensus on how to "maximize the use of excess profits to secure long-term financing for Ukraine.
The talks are taking place on the eve of a meeting of finance ministers and central bank governors of the G7 countries in Italy, where this issue will be discussed, the publication points out.
"I feel like there is momentum and there is interest," a senior U.S. Treasury official said on Friday. - "And we're engaging in tough, detailed economic diplomacy to make sure that we can all come to a common ground. And I think we're making progress on that.
"The United States wants to include language in the G7 joint statement on the use of profits from Russian state assets and has enlisted the support of Canada and the United Kingdom," the newspaper writes, citing Western officials.
France, Germany, Italy, and Japan, as noted, had previously opposed more far-reaching U.S. plans, such as seizing Russia's major assets, fearing that it could set a precedent for seizing state property and harm financial markets. In recent weeks, officials said, they have shown more openness to the idea of using profits to provide loans to Ukraine. The four countries are "coming around," one official said.
The details are still to be agreed upon, however, the official added, including who will issue the debt - just the US or the G7 countries through a special structure - who will guarantee it, and how risks will be shared and repaid if future profits do not materialize.
A senior U.S. Treasury official said any decision would be "essentially a political decision that will be made by the leaders" of the G7 next month. "The goal is to reach a consensus among the finance ministers to make recommendations to the leaders," the U.S. official said.
Another person familiar with the negotiations over Russia's sovereign assets said that the US was not driven by election time.
In addition, earlier this month, EU countries agreed to use part of these profits to jointly purchase weapons for Ukraine. According to this plan, the Belgian central securities depository Euroclear, which holds most of the Russian state assets under sanctions in the bloc, will pay the first tranche of profits in July.
According to officials in Brussels, the G7 scheme faces an additional hurdle, as any plan to use the profits would require a new unanimous decision at the EU level. Countries such as Hungary could potentially cause additional delays, the newspaper writes.
