G7 leaders agree to send about $50 billion to Ukraine

The Ukrainian government already has a preliminary understanding of how the G7 countries will provide a $50 billion aid package using frozen Russian assets. Most of it - $20 billion each - will come from the United States and the European Union, Roksolana Pidlasa, chairwoman of the Verkhovna Rada Budget Committee, told Forbes.

On June 14, at the G7 summit in Italy, G7 leaders agreed to send about $50 billion to Ukraine. The funds are supposed to be serviced and repaid from future profits generated by frozen sovereign Russian assets located in the EU and other jurisdictions. 

However, the US, in order to ensure a steady flow of income to service the loan, demanded guarantees that Russian assets, most of which are located in Europe, would remain frozen.

The EC proposed to extend the bloc's sanctions freezing Russian assets from the current six-month period to 36 months. Other proposed options include extending the sanctions for five years. However, Hungarian Prime Minister Viktor Orban, who has vetoed EU support for Ukraine in the past, is currently blocking such an extension.

On September 17, the FT reported that the EU is preparing to provide Ukraine with up to €40 billion in new loans by the end of the year, regardless of US participation. Brussels has allegedly developed an alternative financing solution to circumvent Hungary's veto, which blocks further freezing of Russian assets. The funds are intended for the financial stability of Ukraine, which, according to Kyiv and the IMF, will face a $38 billion financing gap in 2025.

On September 20, during a visit to Kyiv, European Commission President Ursula von der Leyen announces a proposal to provide Ukraine with macro-financial assistance (MFA) of up to €35 billion for 2024-2025. 

On September 26, it became known that the United States plans to contribute $20 billion to the $50 billion aid package to Ukraine at the expense of Russian sovereign assets if the EU adjusts its sanctions regime against Russia. Even if the EU does not amend its sanctions, the US will still contribute, but for a smaller amount.

Source: Forbes