In a recent meeting, G7 finance ministers discussed the possibility of issuing a loan to Ukraine, secured by profits on frozen Russian assets. This innovative approach aims to provide financing for Kyiv beyond 2024, ensuring stability and support for the country during critical times.
The proposal, based on a US initiative, involves issuing a loan of around $50 billion to Ukraine, to be repaid using profits from approximately €190 billion worth of Russian central bank assets locked in Belgian central securities depository Euroclear. The discussions have been fruitful, with ministers expressing optimism about the potential of this strategy.
Furthermore, the finance chiefs emphasized the importance of pressing China to reduce industrial subsidies that disadvantage western competitors. They also highlighted the significance of implementing a landmark global tax deal and expressed concerns about Israel's plans that could harm the economy of the West Bank.
Ukraine's finance minister highlighted the urgent need for financial support, estimating a budget gap of over $10 billion in 2025 for essential needs. While the loan backed by profits is a step in the right direction, he stressed the necessity of a more permanent solution through the confiscation of Russian assets.
Despite challenges and uncertainties, US Treasury Secretary Janet Yellen remains positive about the progress made so far. Key details of the loan, such as the amount and guarantees in case of default, are still being negotiated. Europeans are particularly focused on fair risk-sharing to ensure a balanced approach to the proposal.
Overall, the G7's efforts to secure funding for Ukraine reflect a commitment to supporting the country in its time of need. By exploring innovative financing solutions and addressing global economic issues, ministers are paving the way for a more stable and prosperous future for Ukraine and beyond.