The G7 group of wealthy democracies will look at ways of using the future interest from frozen Russian assets to help Ukraine as it continues to battle invading Russian forces, finance ministers from the group said on Saturday.
French Finance Minister Bruno Le Maire said ministers aimed to "reach a political agreement in principle" and not a ready-made solution
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G7 aims to use frozen Russian assets to help 'desperate' Ukraine
STRESA, Italy May 25 (Reuters) - The G7 will explore ways to use the future income from frozen Russian assets to boost funding for war-torn Ukraine, finance chiefs from the Group of Seven industrial democracies said on Saturday, but offered no details of how to do so.
CONFLICTS ITALY
G7 ministers close in on Russian assets deal for Ukraine
G7 finance ministers are expected to agree on options for using interest from frozen Russian assets to help Ukraine.
- Kyiv has stepped up its appeals for more international financial aid to fight off Moscow's invasion.
- The G7 and its allies froze some $300 billion (€276 billion) of Russian assets shortly after Moscow launched a full-scale invasion of its neighbor in February 2022.
- The meeting comes after the EU this week formally approved a plan to use interest from the Russian assets it has frozen, estimating that this could produce up to €3 billion annually for Ukraine.
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"We are making progress in our discussions on potential avenues to bring forward the extraordinary profits stemming from immobilized Russian sovereign assets to the benefit of Ukraine."
- The statement contained no figures or details, reflecting the fact that several legal and technical issues need to be resolved before such loans could be made.
- Any detailed agreement would require the approval of G7 leaders, who meet next month in Puglia, Italy.
- The United States, for its part, has been urging its G7 partners — Japan, Germany, France, Britain, Italy and Canada — to create a loan facility for Ukraine backed by future interest generated by the frozen Russian assets.
That proposal, which could raise $50 billion in the short term for Kyiv, raises several questions, including who would issue the debt and the apportioning of risk between the G7 partners.
At the end of the meeting, US Treasury Secretary Janet Yellen said that a loan for Ukraine backed by the income from frozen Russian sovereign assets is the "main option" for G7 leaders to consider in June but added that she doesn't want to "take anything off the table as a future possibility."
The ministers will be joined on Saturday by Ukraine's finance minister, Serhiy Marchenko.
Ukraine struggling amid shortagesThe meeting comes as Kyiv claims to have "stopped" a Russian advance in the Kharkiv region.
- However, that claim came amid admissions by Ukraine's General Staff that "the enemy has partial success" and that "the situation is tense."
In another positive development for Kyiv on Friday, however, Washington announced a fresh $275 million package of military aid.
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Ukraine's finance minister, Serhiy Marchenko.
25 December 2023
World Bank greenlights $1.34 billion boost in aid for critical public services in Ukraine
Ukraine on December 25 received $ 1.34 billion from the World Bank (WB). The funds will be used to partially compensate for the state budget of Ukraine, in particular for the payment of pensions, as well as for salaries to employees of the State Emergency Management Service (GSHS).
It is impossible to spend WB money on military purposes.
Ukraine received financial assistance worth a billion dollars: what will the money go for
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This is the sixth payment of additional financing under the project "Support to government spending on sustainable public administration in Ukraine" (PEACE in Ukraine), reported Ministry of Finance Ukraine.
The payment consists of such parts:
- World Bank loan of $ 1.086 billion through the ADVANCE Ukraine trust fund guaranteed by the Japanese government;
- $ 190 million from Norway,
- $ 50 million from the United States and
- $ 20 million from Switzerland.
As OBOZ.UA reported, December 21 Ukraine received the last 1.5 billion euros of budget assistance from the European Union.
- The funds are included in the annual 18 billion package and have already arrived at the accounts of Ukraine. You can spend money from this package to cover the "hole" in the budget, ensure the operation of social infrastructure and implement reforms, but not for military needs.
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The EU Council nevertheless reached agreement in principle on this issue, although the decision itself was postponed. And in case Hungarian Prime Minister Viktor Orban, who is called "the other of Putin," continues to veto, the EU will have a fallback.
Only verified information in our country Telegram channel OBOZ.UA and Viber. Do not be fooled by fairies!
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8. We welcome the EU decision to direct extraordinary profits stemming from
immobilized Russian sovereign assets for the benefit of Ukraine.
Following up on the G7
Leaders’ Statement of 24 February 2024, we are making progress in our discussions on
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potential avenues to bring forward the extraordinary profits stemming from immobilized
Russian sovereign assets to the benefit of Ukraine, consistent with international law and our
respective legal systems, with a view to presenting options to provide additional financial
support to Ukraine to our Leaders ahead of the Apulia Summit in June.
We reaffirm that,
consistent with our respective legal systems, Russia’s sovereign assets in our jurisdictions
will remain immobilized until Russia pays for the damage it has caused to Ukraine.
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6. Support for Ukraine
We salute once more the bravery and resilience of the Ukrainian people and reaffirm
our unwavering support for Ukraine for as long as it takes.
We remain strongly committed to
helping Ukraine meet its urgent short-term financing needs, as well as coordinating its long-term recovery and reconstruction priorities (currently estimated by the WBG at almost USD
486 billion over 10 years), including within the Multi-Agency Donor Coordination Platform.
- In this context, we strongly welcome the approval by the United States of the Ukraine Security Supplemental Appropriations Act, which includes USD 61 billion in economic and military support to respond to Russia’s war against Ukraine.
- We also welcome the disbursement to date of EUR 6 billion of bridge financing to Ukraine under the EUR 50 billion EU Ukraine Facility, as well as the recent EU approval of the “Ukraine Plan”, which will be the basis for regular assistance to Ukraine under the Facility and will mobilize public and private investments for its urgent economic recovery and reconstruction, also in view to Ukraine’s future accession to the EU.
- the announcement by the United Kingdom of support for Ukraine totallng GBP 3 billion per year until 2030, or for as long as it takes;
- Japan’s approval of additional USD 2 billion budget support for 2024; and
- the additional CAD 4.2 billion in military, development and financial aid recently announced by Canada.
Building on the positive completion of the first three reviews of the IMF Extended Fund Facility (EFF) Program for Ukraine, and on the enduring commitment of the Ukrainian authorities to reform under challenging circumstances, we look forward to a successful completion of the fourth EFF review in June.
We also support Ukraine’s efforts to reach a
timely debt-treatment agreement with its private creditors, in line with its IMF Program.
We
look forward to the Ukraine Recovery Conferences, to be hosted in Berlin in 2024 and in
Rome in 2025.
7. Our financial and broader economic sanctions are already having a clear impact in
restricting Russia’s ability to fund and support its illegal invasion of Ukraine.
- We remain committed to tightening compliance with and enforcement of the Oil Price Cap while maintaining the stability of global energy markets.
- We will respond robustly to price cap violations, including by sanctioning those engaged in deceptive practices while transporting Russian oil and taking action against the networks Russia has developed to extract additional revenues from evasion.
- We are also committed to further financial and economic sanctions to reduce Russia’s sources of revenue and capacity to wage war against Ukraine, including continuing to target Russia’s energy revenue and future extractive capabilities.
- We will counter attempts to evade or circumvent sanctions, including through facilitation of Russia’s defence industry procurement efforts by financial institutions.
- Where appropriate, we stand ready to impose sanctions on individuals and entities that help Russia acquire advanced materials, technology, and equipment for its military industrial base.
- We are also re-doubling our domestic efforts to make sure that companies and financial institutions in G7 countries are not party to Russia’s circumvention schemes.
We call upon Iran to stop
assisting the Russian military and its war on Ukraine.
We express our concern about
transfers to Russia from firms around the world, including those in China, of dual-use
materials and components for weapons and equipment for military production.
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