G7 Appropriates $50 Billion of Russia’s Money for Ukraine

At the behest of the United States, G7 leaders have agreed to offer at least $50 billion in loans to Ukraine, using interest from Russian sovereign assets. Russia’s assets in the G7 countries were frozen after the invasion of Ukraine more over two years ago.

In addition to Ukraine’s future, the conflict between Israel and the Palestinian militant group Hamas in the Gaza Strip was a prominent topic on the first day of their summit in Fasano, southern Italy, with the G7 members endorsing a US-proposed cease-fire agreement.

The G7 loan agreement was reached amid concerns about “Ukraine fatigue,” with questions remaining about how long the US and other like-minded countries can stay united in supplying Kyiv with weaponry and assisting it in rebuilding damaged infrastructure.

US President Joe Biden has described the Russian invasion, which began in February 2022, as “a test” for the globe, presenting the question of whether it can unify “for sovereignty, freedom, and against tyranny.”

“The United States, the G7, and countries around the world have constantly answered the question with ‘Yes, we will.’ We’ll say it again. “Yes, again and again, we will stand with Ukraine,” Biden said at a joint press conference with Ukrainian President Volodymyr Zelenskyy, who was invited to the summit as a guest.

US perpetrated the loan

The US has committed to provide loans of up to $50 billion, according to a senior Biden administration official, adding that it will not be the only lender. “It will be a loan syndicate. We’re going to share the risk because we’re all committed to getting this done,” the official explained.

According to a Japanese official, Prime Minister Fumio Kishida informed his G7 counterparts that his country’s funds will not be utilized for military purposes due to its war-renouncing Constitution.

However, the official declined to provide information about the new lending scheme. He stated that the leaders “are planning to make some kind of announcement” regarding the plan in their communique, which is anticipated to be released Friday.

Since the invasion, the G7 has slapped a number of economic restrictions on Moscow, including asset freezes. The US official, who previewed the arrangement on the condition of anonymity, did not reveal which G7 members will participate in the new project.

A G7 source said Japan, the United Kingdom, and Canada are expected to join the US-led initiative, while France, Germany, and Italy are unlikely to participate for the time being because the European Union already has a comparable support plan.

Russia to bear the expense

According to the US source, Ukraine will not have to repay up to $50 billion in loans from the group of the world’s top industrialized democracies, which will begin this year. Russia will ultimately bear the expense.

According to the Japanese government, the G7, along with Australia, has frozen around $280 billion in Russian governmental assets, as well as approximately $58 billion in assets owned by individuals, companies, and organizations in the country.

Kishida’s government has concentrated on giving support for Ukraine’s rehabilitation in accordance with Japan’s Constitution, such as demining cooperation and nonlethal defense equipment.

During the summit’s opening session, Kishida emphasized the importance of maintaining a free and open international order based on the rule of law, as well as strengthening connections with developing and emerging countries in the “Global South,” according to Japan’s Foreign Ministry.

Both “have become increasingly important as we face new challenges, including Russia’s continued aggression against Ukraine and heightened tensions in the Middle East,” Kishida told the ministry.

Rebuilding Ukraine

Regarding Ukraine, Kishida stated that Japan is considering putting sanctions on foreign companies and groups for exporting supplies to Russia through third countries that could be diverted for military purpose, according to the ministry.

The action would be implemented with specific entities in China, India, Kazakhstan, the United Arab Emirates (UAE), and Uzbekistan in mind, it stated.

The World Bank estimates that rebuilding Ukraine will cost $486 billion over the next decade, which Ukraine is expected to fund with loans, creating commercial opportunities for Japanese and international corporations.

In late May, Biden announced a three-stage cease-fire plan to end the conflict between Israel and Hamas, claiming it had been suggested by Israel and is customarily backed by the US.

The United Nations Security Council approved the plan earlier this month, but US Secretary of State Antony Blinken stated on Wednesday that Hamas had made various adjustments, some of which were impossible.

International pressure has mounted on Israel to halt its military campaign in Gaza, which has displaced thousands of Palestinians and caused serious food, water, and energy shortages.

The G7 criticized Hamas’ “terrorist” strikes on October 7, which started Israel’s continuing offensive in the Gaza Strip, but avoided publicly denouncing Israel.

Source: BBC