EU to consider G7 plan for use of profits from Russian assets after G7 summit

EU finance ministers will consider a G7 plan to exploit the unintended profits generated from Russian assets immobilized in the West after Russia's invasion of Ukraine, following a G7 summit later in June, Irish minister Pascal Donohue, who chairs meetings of euro zone finance ministers, said, UNN writes with reference to Reuters.

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Donohue said after a video conference of EU ministers on Wednesday that there is unwavering support for helping Ukraine meet its financial needs.

"The discussion between the ministers showed appreciation for constructive interaction with partners in the group of seven on this issue and full support for its continuation, "Donohue said.

"The finance ministers will consider at their June meeting the need for further discussions after the G7 summit in Apulia," he added.

After Moscow's invasion of Ukraine in February 2022, Western countries immobilized about 3 300 billion of the Russian central bank's assets, which generate profits of 2.5-3.5 billion euros a year.

The European Union, where the bulk of its assets are located, has agreed to allocate annual profits to a special fund that will pay for weapons for Ukraine and the country's recovery.

But within the group of seven, which includes the United States, Canada, Japan, the United Kingdom, France, Germany and Italy, Washington insists on using the profits to provide a large-scale loan to Ukraine now that the money is needed most.

Under the G7 plan, which the EU will consider after the G7 meeting in Italy on June 13-15, profits from frozen assets would serve interest and could repay the capital of a loan granted to Ukraine or the US, or the US and other group of seven countries or the EU from its budget.

Interest, repayment terms, and loan size are still being discussed. US Treasury Secretary Janet Yellen said that the loan amount could amount to 5 50 billion.

To issue such a loan to Ukraine-either bilaterally from one or all the governments of the group of seven or the EU, or by raising money on the market and using an intermediary for payments, such as the World Bank – the EU will have to provide guarantees to the credit issuer that profits from assets will be provided to service it, the document for discussion by EU ministers says.

The EU will also have to make changes to its sanctions regime against Russia on frozen assets to eliminate the need for a unanimous extension of sanctions on this every six months, as it is now, to eliminate uncertainty.

US seeks EU sanctions guarantee to back $50bn Ukraine loan - FTJun 5 2024, 06:34 AM • 18091 view