The Group of Seven (G7) countries, comprising the United States, Canada, Japan, Britain, France, Germany and Italy, as well as the European Union, are working to reach an agreement policy on a substantial $50 billion loan for Ukraine by the end of October. The effort aims to ensure that funds are available before the end of the year, as Valdis Dombrovskis, executive vice-president of the European Commission, said on Monday.
The loan, which is expected to be repaid using profits generated from Russian assets tied up in the West, is crucial for Ukraine. The European Union, owning more than two-thirds of these frozen assets, is expected to contribute the majority of the loan, with up to 35 billion euros ($39 billion) coming from its share.
Speaking to the European Parliament, Dombrovskis highlighted that Canada, the United Kingdom and Japan have already made clear commitments to participate in this loan initiative. However, the United States is seeking assurances from European partners that funds generated from frozen Russian assets will be available for loan repayment for as long as necessary.
Current EU policy requires a unanimous decision every six months to maintain the freeze on Russian assets, posing a legal uncertainty that the United States wants resolved. To alleviate this concern, the EU is seeking to extend the asset freeze renewal period from six months to 36 months, with a unanimous vote expected in October. Although the outcome is likely, it is not assured.
If the EU fails to extend the renewal period, the United States could still participate in the loan initiative, but would likely contribute a reduced amount. The urgency for the EU to finalize the legal framework for its share of the loan arises from the fact that the EU can only borrow from its budget until the end of 2024.
This financial assistance is crucial for Ukraine as it continues to face its current challenges. The efforts of the G7 and the EU to accelerate this process underline the commitment of the international community to support Ukraine.
Reuters contributed to this article.
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