G-7 may utilize frozen Russian asset revenues for a $50 billion aid package for Ukraine
Bloomberg reports, referring to its source, that the US is in negotiations with G7 to provide $50 billion in aid to Ukraine, with the massive outlay being repaid with the windfall profits from sovereign Russian asset.
According to the publication, the plan is being discussed among the Group of Seven nations, with the US pushing to have an agreement when G-7 leaders meet in Italy in June.
The plan signals a strong show of support from Washington after Congress approved $61 billion in assistance for Kyiv in April that had been held up for months. The Congress also voted to confiscate the $6 billion in frozen Russian assets currently held in US banks, which form part of the larger $300 billion frozen by G7 countries.
According to the G7 plan revealed by Bloomberg:
- The US is leading talks with G-7 allies to provide up to $50 billion in aid to Ukraine, with the goal of reaching an agreement at the June G-7 meeting in Italy.
- The massive aid package would be repaid using the windfall profits generated from frozen Russian sovereign assets, mostly held in Europe, which are accruing interest.
- About €159 billion of frozen Russian is held by Euroclear. These assets could grow to €190 billion by 2028 as they mature, generating around €5 billion in annual windfall profits.
- One option involves issuing $50 billion in bonds backed by the windfall profits from the frozen assets.
- The US is pushing for this agreement partly to shield allied assistance to Ukraine from potential political shifts in the US and Europe.
- The plan would replace an EU-only proposal to transfer windfall profits from Euroclear to support Ukraine twice a year, which is expected to be agreed upon this month.
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