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Washington’s G7 allies are supporting the US plan to provide tens of billions of dollars in funding to Ukraine before Donald Trump can return to the White House.
Under the plan to be discussed at the June summit, Kyiv will receive an advance payment from the G7 loan. The loan would be backed by future profits generated from some $350 billion in Russian assets that have been fixed in the West in response to Moscow’s full-scale invasion of Ukraine.
According to eight Western officials, some G7 members were reluctant to endorse the plan but their position changed after diplomatic efforts by the United States, which is seeking to secure a deal at the summit. G7 leaders next month.
This plan will generate about $50 billion to disburse to Ukraine as early as this summer. official said. The funding will come at a crucial time for Kyiv as its forces try to hold the line amid a new Russian offensive following delays in the delivery of Western military aid. West.
More reluctant G7 members have backed the plan as a way to ensure long-term funding for Kyiv if Joe Biden loses this year’s presidential election to Trump, who opposes US aid to Ukraine .
It could “be done before November, so even if Trump wins, the money is already deployed,” said one participant in the discussion.
Officials from Italy, which holds the G7 rotating presidency, said the summit would seek to reach consensus on how to “maximize the use of windfall profits to ensure long-term financing”. for Ukraine”.
Negotiations are taking place ahead of a meeting of G7 finance ministers and central bank governors in Italy next week, when the issue will be discussed.
“I feel motivated and there is interest,” a senior US Treasury official said Friday. “And what we’re engaging in is trying to engage in a tough and detailed economic diplomacy to make sure we can all be on the same page. And I think we’re making progress there.”
The United States wants to include this language in the G7 joint statement addressing the leveraging of proceeds from Russian state assets – and has received support from Canada and Britain, Western officials said.
France, Germany, Italy and Japan have previously opposed more far-reaching US plans, such as confiscating underlying Russian assets, out of concern this could set a precedent for home equity confiscations. water and wreaked havoc on financial markets. In recent weeks, officials said, they have appeared more open to the idea of leveraging profits to make loans to Ukraine.
One official said the four countries were “turning a corner.”
However, the official added, details have yet to be agreed, including who will issue the debt – the US alone or the G7 countries through a special purpose vehicle – who will guarantee that debt as well as how to share risk and repayment in the event of future profits. Don’t materialize.
The senior US Treasury official said any decision “will essentially be a political decision, one that will be made by G7 leaders” next month. “The goal is to get consensus from finance ministers to provide advice to leaders,” the US official said.
Another person familiar with the negotiations over Russia’s sovereign assets said the United States was not motivated by election timing.
Individual, EU countries earlier this month agreed to use part of this profit to jointly buy weapons for Ukraine. Under that plan, Belgium’s central security depository Euroclear, where most of the bloc’s sanctioned state assets held by Russia are stuck, would pay out its first tranche of profits as soon as July.
According to officials in Brussels, the G7 plan faces a further obstacle, as any plan to capitalize on the gains would need a new unanimous decision at EU level. Countries like Hungary may cause more delays.
Additional reporting from Kana Inagaki in Tokyo and Martha Muir in Washington
