US ready to provide Ukraine with $50 billion loan on one condition
Illustrative photo (Getty Images)
The United States is ready to provide Ukraine with a $50 billion loan, which will be repaid using profits from frozen Russian assets, contingent upon the European Union's indefinite extension of sanctions against Russia, citing the Financial Times (FT).
The US proposal is outlined in an EU discussion document, reviewed by FT.
According to the document, the US demands that the EU extend the sanctions on Russian state assets until the end of the war. These sanctions currently expire every six months unless there is a unanimous decision to renew them.
However, any such change in the EU regime would require the approval of leaders, including Hungarian Prime Minister Viktor Orban, who zealously guards his permanent veto power over sanctions decisions.
Washington is pushing for an agreement to be reached ahead of the G7 leaders' summit, which will take place in Italy next week. The financing mechanism involving profits from frozen assets is expected to be a central element of support for Ukraine.
The primary option under consideration is the US plan to provide Ukraine with a loan, possibly in tandem with other G7 nations, approximately matching the estimated "windfall profits" from the hundreds of billions of dollars in frozen Russian assets held in the West. Diplomats believe this could raise up to $50 billion.
The exact details of the loan, such as the repayment term, interest rate, and whether it will be provided directly or through an intermediary like the World Bank, are yet to be determined.
However, Washington views any such loan as "conditional" on the EU allocating the profits from the assets for repayments and ensuring that "Russian central bank assets held in the EU remain immobilised until Russia has agreed to pay for the damage caused to Ukraine"
US loan to Ukraine
The G7 countries supporting Ukraine are negotiating how to leverage frozen Russian assets for Ukraine's benefit. The United States has proposed providing Ukraine with a $50 billion loan secured by Russian assets.
At a meeting in late May, G7 finance ministers made some progress in discussing this issue.
The head of the World Bank said that he is ready to lead a G7 loan fund for Ukraine if an appropriate decision is made.
