European Union countries are poised to fund up to 60% of the $50 billion loan pledged by the Group of Seven (G7) major democracies for Ukraine.
This loan will be backed by income from frozen Russian assets, as stated by Italy’s Economy Minister, Giancarlo Giorgetti, on Friday.
The G7 plan involves a multi-year loan leveraging future revenues from approximately $300 billion in impounded Russian sovereign funds, with most of these funds blocked in the European Union, Investing Insider reported.
During a meeting of European finance ministers in Luxembourg, Giorgetti mentioned that EU states would contribute between “50 and 60%” of the loan disbursement.
This statement seems to contradict Prime Minister Giorgia Meloni’s comments at the end of the G7 summit in Italy, where she indicated that European states would not be directly involved in issuing the $50 billion loan for now.
“We will start discussing the share for the U.S., Canada, Japan, and the UK,” Giorgetti added.
The freezing of Russian central bank reserves and other sovereign assets came as a result of G7 sanctions imposed after Moscow’s invasion of Ukraine in February 2022.
Approximately 190 billion euros of these assets are held in Euroclear, a central securities depository based in Belgium, making the EU a significant player in any efforts to utilize these assets.
The United States holds about $5 billion.
These developments highlight the EU’s crucial role in the financial strategy for supporting Ukraine, leveraging impounded Russian funds to provide substantial economic aid.
The conflicting statements from Giorgetti and Meloni indicate ongoing discussions and negotiations within the EU and G7 regarding the exact distribution and responsibilities of the loan contributions.
The resolution of these discussions will determine how effectively the international community can mobilize resources to support Ukraine amid the ongoing conflict with Russia.