Leaders from the Group of Seven nations meeting in southern Italy have agreed to provide a $50 billion loan to Ukraine to help the country defend itself against the ongoing Russian invasion that began in early 2022.
Roughly $300 billion in frozen Russian assets held largely in European banks will provide collateral for the loan, and interest produced by those assets will be used to cover loan repayments owed by Ukraine.
The U.S. will reportedly underwrite the loan, to be distributed before the year is over, but other members of the G7 – which includes Canada, France, Germany, Italy, Japan and the U.K., in addition to the U.S. – are expected to provide funds as well. One official referred to the still-developing arrangement as a “loan syndicate” led by the U.S.
Ukraine President Volodymyr Zelensky, who was present at the beginning of the G7 meeting, thanked the group for the loan, which he said would be used for both defense and reconstruction purposes. He also called on the leaders to go further and seize the Russian assets in full – an option that has met resistance in the European Union due to concerns about legality and how international capital markets might react.
Speaking to reporters at the meeting, President Joe Biden said the loan agreement sends a message to Russian President Vladimir Putin. “He cannot wait us out, he cannot divide us,” Biden said. “We're going to stand with Ukraine.”
Biden said two additional steps taken at the meeting – a bilateral security agreement signed between the U.S. and Ukraine, and new sanctions on countries aiding Russia – reinforce the message.
Writing about the plan in The New York Times, Treasury Secretary Janet Yellen said the loan will provide Ukraine with “a decisive amount of funding” that sends a “clear message” to Putin from the U.S. and its allies: “We are in it for the long haul.”
European Council President Ursula von der Leyen, who also attended the G7 meeting, struck a similar tone. “It is a strong signal that we are sending to Ukraine that we will support Ukraine in its fight for freedom for as long as it takes,” she said. “It is also a strong signal to Putin that Putin cannot outlast us.”
