G7 Approves $50 Billion Loan for Ukraine from Russian Assets
US President Joe Biden emphasized the G7’s commitment to Ukraine by stating this move serves as a clear message to Russia that “we’re not backing down.” Moscow, however, has issued threats of “extremely painful” retaliatory measures in response.
Although the funds are not expected to be available until the end of the year, the $50 billion loan is designed to support Ukraine’s ongoing war efforts and bolster its economy over the long term. Additionally, at the G7 summit held in Italy, President Volodymyr Zelensky of Ukraine and President Biden signed a historic 10-year bilateral security agreement, providing military and training aid to Ukraine but stopping short of committing US troops to the conflict.
The G7 and the EU had previously frozen $325 billion worth of Russian assets following the full-scale invasion of Ukraine in 2022. These assets generate about $3 billion annually in interest, which under the new plan, will be used to cover the annual interest payments on the $50 billion loan secured on international markets for Ukraine.
During a joint press conference in Puglia, southern Italy, President Biden stated that the loan would “put that money to work for Ukraine” and reaffirmed the united stance against Russian President Vladimir Putin. Biden reiterated that Putin “cannot wait us out, he cannot divide us, and we’ll be with Ukraine until they prevail in this war.” President Zelensky expressed his gratitude to the US and other allies for their steadfast support, calling the security deal “the strongest agreement within Ukraine and the US since our independence in 1991.”
The G7 nations—Canada, France, Germany, Italy, Japan, the UK, and the US—have played crucial roles in providing financial and military support to Ukraine in its struggle against Russian occupation. UK Prime Minister Rishi Sunak described the $50 billion loan as “game changing.”
This loan is a significant sum, especially when compared to the $61 billion in US military aid agreed upon in May. Some advocates in Kyiv had hoped for the release of the entire $300 billion in frozen Russian assets rather than just the interest. However, the European Central Bank dismissed this option.
Unlike the immediate impact of the US aid package, which facilitated the delivery of missiles to the front lines, the loan funds will likely arrive at the end of the year, limiting their effect on the current phase of the war. Ukraine continues to urgently request more weapons, especially air defense systems and the eagerly awaited F-16 fighter jets, expected to begin arriving by summer. At the G7 summit, Zelensky confirmed that the new security agreement includes these aircraft shipments.
The loan deal carries significant symbolic weight for Ukraine, as it forces the aggressor to contribute to the defense and reconstruction of the nation it attacked. A close adviser to Zelensky noted that this punitive measure against Russia marks a turning point in the conflict.
Despite this, the loan is unlikely to prompt a Russian withdrawal from the war in Ukraine. Most of the frozen assets of the Central Bank of Russia are held in Belgium, and international law prevents countries from confiscating these assets and reallocating them to Ukraine.
Shortly before the G7’s decision was announced, Russian Foreign Ministry spokeswoman Maria Zakharova warned of impending “extremely painful” retaliatory measures.
