G7 leaders agree to allow Ukraine to use frozen russian assets

On June 13, during the G7 summit in Puglia, Italy, the leaders of the democratic world reached a historic agreement to allow Ukraine to use frozen russian assets.

"It is not the European taxpayers who should pay for the damage caused by russia, but russia itself," said European Commission President Ursula von der Leyen, commenting on the G7 decision.

There is no talk of confiscating the aggressor's assets, which are estimated at $280-300 billion. The decision of the G7 leaders provides for the use of future profits generated by these assets in favor of Ukraine. However, even this option seemed unrealistic a few months ago.

The final mechanism by which the funds will be provided to Ukraine is still being discussed. The main thing is that the fundamental political decision to provide funds has already been made.

The leaders of the G7 countries note that the total amount of funds provided to Ukraine will be "about 50 billion dollars." The final amount is currently unknown.

Presumably, the final amount that Ukraine will be able to claim will be agreed upon by the working groups of the G7 countries, and it will depend, in particular, on the mechanism through which these funds will be transferred.

The decision is based on the US idea of transferring income from russian assets to Ukraine in advance. For this purpose, it is planned to create a special fund under the auspices of one of the international financial organizations (presumably the World Bank). The G7 countries and the EU will then provide loans to this fund and repay them with future revenues from russian assets.

It is expected that each loan provided by a partner country will have a different purpose. Some will be for military purposes, while others will be for non-reconstruction or humanitarian projects.

It is also not yet known whether these funds will be provided unconditionally or in exchange for Ukraine's reforms, as the EU and IMF do. At the same time, the presence of an international financial organization as an intermediary in providing a loan should increase accountability for the use of funds.

Source: Ekonomichna Pravda