US Delays Approval of G7’s $50 Billion Loan to Ukraine, Media Reports
According to a report by Euractiv, Washington is seeking assurances that the West will have the ability to access frozen Russian assets indefinitely to support the financing of Ukraine. Read Full Article at RT.com.
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The financing for the $50 billion loan to Kiev is to be sourced from the interest generated by Russian assets that have been frozen in the Western countries, a step Russia has criticized as unlawful.
According to a report by Euractiv, citing sources familiar with the matter, Washington is responsible for holding up the completion of a G7 initiative intended to provide Ukraine with this substantial loan using the Russian funds seized earlier. The United States and the European Union initially froze approximately $300 billion of Russian sovereign assets following the onset of the Ukraine conflict in early 2022. Since then, Western nations have considered deploying these funds to support Ukraine. Despite discussions, the outright seizure of these assets has not been agreed upon by the West; however, it was decided by the G7 in June to offer Ukraine the $50 billion loan, with the principal to be repaid using the accruing interest from these immobilized assets.
The delay, according to the sources, is due to American worries about the loan's repayment, which relies on the continued freezing of the Russian assets.
As per EU regulations, the sanctions that target Russian assets are subject to renewal every six months, requiring the unanimous consent of all 27 EU member countries. There are concerns, noted by the same diplomatic sources Euractiv spoke to, that Hungary, in its current role leading the EU presidency, could potentially block the renewal of these sanctions in the future.
There is a push from Washington for a more durable solution to ensure that these assets remain frozen, as revealed by the sources. Specifically, the U.S. has proposed extending the sanctions period to one year or more to secure the funds needed indefinitely.
Despite discussions among EU ambassadors about extending the sanctions renewal period up to three years or even indefinitely, as previously reported by the Financial Times, there have yet to be significant developments in addressing the U.S. concerns.
Prime Minister Denis Shmigal of Ukraine, expressing urgency, stated on Tuesday that the funds need to be available by the end of the year, emphasizing that the loan should be interest-free and "provided to Ukraine without any conditions."
Moscow has vocally condemned the freezing of its assets, labeling the move as "theft," and has asserted that utilizing these funds would constitute an illegal action, setting a harmful precedent that could undermine the trust in the Western financial system.
For additional information on economic and financial news, please refer to RT's business section.
Anna Muller for TROIB News
According to a report by Euractiv, citing sources familiar with the matter, Washington is responsible for holding up the completion of a G7 initiative intended to provide Ukraine with this substantial loan using the Russian funds seized earlier. The United States and the European Union initially froze approximately $300 billion of Russian sovereign assets following the onset of the Ukraine conflict in early 2022. Since then, Western nations have considered deploying these funds to support Ukraine. Despite discussions, the outright seizure of these assets has not been agreed upon by the West; however, it was decided by the G7 in June to offer Ukraine the $50 billion loan, with the principal to be repaid using the accruing interest from these immobilized assets.
The delay, according to the sources, is due to American worries about the loan's repayment, which relies on the continued freezing of the Russian assets.
As per EU regulations, the sanctions that target Russian assets are subject to renewal every six months, requiring the unanimous consent of all 27 EU member countries. There are concerns, noted by the same diplomatic sources Euractiv spoke to, that Hungary, in its current role leading the EU presidency, could potentially block the renewal of these sanctions in the future.
There is a push from Washington for a more durable solution to ensure that these assets remain frozen, as revealed by the sources. Specifically, the U.S. has proposed extending the sanctions period to one year or more to secure the funds needed indefinitely.
Despite discussions among EU ambassadors about extending the sanctions renewal period up to three years or even indefinitely, as previously reported by the Financial Times, there have yet to be significant developments in addressing the U.S. concerns.
Prime Minister Denis Shmigal of Ukraine, expressing urgency, stated on Tuesday that the funds need to be available by the end of the year, emphasizing that the loan should be interest-free and "provided to Ukraine without any conditions."
Moscow has vocally condemned the freezing of its assets, labeling the move as "theft," and has asserted that utilizing these funds would constitute an illegal action, setting a harmful precedent that could undermine the trust in the Western financial system.
For additional information on economic and financial news, please refer to RT's business section.
Anna Muller for TROIB News
