G7 announces loan for Ukraine and interest from frozen Russian assets to be used for Ukraine

RUSSIA / FSU POLITICS - In Brief 14 Jun 2024 by Alex Teddy
On June 13 Biden and Zelensky signed a 10-year security agreement. Zelensky said this will lead to Ukrainian membership of NATO. However, that is far from sure. The agreement covers arms supply and production. Biden said 5 countries have promised to provide Ukraine with more Patriot air defense systems. The countries were not identified by him but some seems to be coming from Germany. For months Ukraine has pleaded for more air defense. The two presidents met at the G7 Summit in Italy. Ukraine is not a member of the G7. It used to be the G8 including Russia but Russia was expelled for invading Ukraine in 2014. The G7 agreed to lend Ukraine USD 50 billion. USD 260 billion of frozen Russian assets will be used as collateral. Most of this is held in the EU and particularly in Belgium. The EU has ruled out confiscating the Russia assets because this would be illegal and could lead to other countries withdrawing their assets from the EU. Interest on the Russian assets accrue over USD 3 billion each year and this will be used to allow Ukraine to pay the interest on the loan.  Putin believes that time is on his side. The West will eventually get fed up of supporting Ukraine. Politicians will be voted into office who will cut off aid to Ukraine. The loan makes this less likely. Support for Ukraine is guaranteed for several years. The West wants Russia to conclude that the cost of the war is too high. Canada announced it is donating armored vehicles to Ukraine. The United Kingdom is donating USD 310 million in humanitarian aid.  Ukraine increasingly needs electricity from the EU because Russia is destroying Ukrainian electricity generation. The G7 is giving USD 1 billion to hel...

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