G7 leaders agree to loan Ukraine money backed by profits from frozen Russian investments as Biden pledges US support

Group of Seven leaders have reached an agreement to loan money to Ukraine backed by the profits from frozen Russian investments, a senior administration official confirmed Thursday.

The United States and its G7 contemporaries have placed a high value on showing their support for Ukraine during this year’s summit, which is taking place in Italy. While Ukraine is not a G7 member, its president, Volodymyr Zelensky, attended the summit and participated in a Thursday evening joint news conference with Biden.

“Would we stand with Ukraine?” Biden said at the news conference. “Would we stand for sovereignty, freedom, and against tyranny? The United States, the G7 and countries around the world have consistently answered that question by saying yes we will. We will say it again … we’re going to stand with Ukraine.”

The leaders will soon issue a joint communiqué, the product of “years” of negotiation complicated by a patchwork of jurisdictional laws that required the direct involvement of Biden and national security adviser Jake Sullivan, among other top US officials.

“When you have a commitment at the highest political levels, technocrats act and technical details get worked out,” the official said.

“There was shared recognition here in Puglia by every G7 member that the situation on the battlefield remains difficult, and that if the war continues, Ukraine is still going to have a large financial need next year and beyond, and that this summit is our best chance to act collectively to close the gap,” the senior official said.

The official added that it’s “only fair that we close the gap by making Russia pay, not our taxpayers, and we found a way to do so that respects the rule of law in every jurisdiction.”

During the news conference, Biden reaffirmed his commitment to Ukraine after both leaders signed an agreement vowing lasting US support for Ukraine’s defense now and in the future.

But Biden might be making a commitment that he cannot fulfill if his political rival, former President Donald Trump, again wins the White House in November.

Further US support for Ukraine could be jeopardized under a new Trump administration. The former president has long spoken admirably of strongmen, including Russian President Vladimir Putin, and shocked world leaders by saying earlier this year that he would let Russia “do whatever the hell they want” to US partner countries who don’t fulfill certain defense spending obligations.

For his part, Zelensky appeared outwardly optimistic that his country would retain US support no matter who is the president.

“They work based on the voice of their people and it is impossible without people,” Zelensky, who was speaking Ukrainian, said of US leaders.

“I am sure that this nation chooses leaders and presidents … and it seems to me that no matter whom the nation chooses, first and foremost, it seems to me that everything depends on the unity within this or that state — and if the people are with us, any leader will be with us in this struggle for freedom,” he added, according to a realtime translator.

The loan will be drawn from funds frozen by Western leaders in the wake of Russia’s invasion of Ukraine in 2022. While just $3 billion in frozen funds is located in US banks, a much larger share, adding up to hundreds of billions of dollars, is located in banks in Europe.

Negotiators have focused on a loan amount of about $50 billion.

It will take some time before Ukraine begins to receive this money, but the official said the effort would “move with urgency” and the commitment remains “to be ready to disburse $50 billion this calendar year.” If the loan is disbursed by the end of 2024, it would ensure the money got to Ukraine before a potential change in US presidents. Biden is facing off against former President Donald Trump in November’s presidential election and Trump has refused to commit to sending additional funding to Ukraine.

In the United States, which has remained a crucial ally to Ukraine, promises of funding for defense systems and military weaponry are known to be difficult to fulfill. Earlier this year, the Republican-led Congress held up critically needed military funding for the war-torn country after Trump came out against a deal. That holdup carried with it real-world consequences to Ukraine’s defense capabilities.

Though the Senate would eventually pass a $95 billion aid package that included funding for Ukraine, Israel and Taiwan, Ukrainian officials have said that aid came too late for troops on the ground.

The agreement reached in Italy on Thursday would free up chests of funds in Europe that would not be hampered by further political bickering in the United States.

“The next steps are to enshrine the communiqué commitments with the EU 27, the full membership, then we need to write contracts between the lenders … the recipient, which is Ukraine, and the intermediaries,” the official said.

From there, there will be an agreement on a disbursal schedule.

Should a peace agreement be reached and the war end, there is also a plan in place: “G7 leaders have committed that the assets will remain immobilized until Russia pays for the damages that’s caused. So if there is a peace settlement, either the assets stay immobilized and keep generating interest to repay the loans, or Russia pays for the damage it’s caused. Either way, there’s a source of repayment.”

This story has been updated with additional reporting.

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