G7 countries considering using income from frozen Russian funds to give €30bn loan to Ukraine

Thursday, May 23, 2024 - Finance ministers from the Group of Seven major democracies meeting in Italy this week are set to discuss a European Union plan to use the income from frozen Russian assets to fund Ukraine.

The G7 comprises the United States, Japan, Germany, France, Britain, Italy and Canada.

According to CNN, the meeting which will happen on Thursday, May 23, in the northern Italian town of Stresa is set to do the groundwork for enabling G7 heads of government to reach a final decision on using frozen Russian funds at a summit in southern Italy in June.

Remember, the G7 froze around €270 billion worth of financial assets soon after Moscow's attack on Ukraine in February 2022.

Since then, the European Union and other G7 countries have debated how to use the funds to help Ukraine, and are now Lazer focused on a €30 billion loan to Kyiv.

The United States has proposed seizing the assets completely, but Europe is wary, saying there are risks to the euro currency and potential legal repercussions.

The talks on Thursday will therefore be focused on using income from the assets – not the assets themselves – and any decision must have the backing of the EU and a solid legal basis.

The European Union already has begun to set aside windfall profits generated from frozen Russian central bank assets, with the bloc estimating the interest on that money could provide around €3 billion each year.

In March, EU foreign policy chief Josep Borrell told reporters: "The Russians will not be very happy. The amount of money – 3 billion per year – is not extraordinary, but it is not negligible”.

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