The United States is negotiating with its G7 partners to provide Ukraine with $50 billion in aid.
As Bloomberg notes, these expenses will be repaid from profits from frozen Russian assets, on which interest accrues mainly in Europe.
$50 billion to Ukraine now, which Russia will give later
The plan is being discussed at the Group of Seven, with the US pushing for an agreement to be reached when G7 leaders meet in Italy in June, according to people familiar with the proposal. Discussions on the topic have been difficult and it could take months to reach an agreement, according to people familiar with the proposal.
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The plan shows strong support from Washington after the US Congress in April approved $61 billion in aid for Kyiv, which had been delayed for months by partisan differences. The move will also put pressure on the European Union to drop its objections to the use of frozen Russian funds.
When US Treasury Secretary Janet Yellen was asked about a similar proposal, in which America or other G7 countries would provide bailout money and the EU would pay it back using frozen assets, she responded that “that's it , what we are discussing”.
— Ideally, we'd like to see the entire G7 involved, not just the United States, — she told Bloomberg.
The proposed idea follows months of discussion among allies about how to, on the one hand, address European concerns about the risks of using frozen Russian assets, and, on the other, put aid to Ukraine on a more sustainable basis.< /p>
According to interlocutors, the US initiative boils down to finding a way to provide Ukraine with the maximum possible support quickly, and not in smaller amounts, through better mobilization of profits received from frozen assets.
As US President Joe Biden faces a challenge from his Republican predecessor Donald Trump in the November election, a key element of the US effort is also protecting allied aid to Ukraine from political changes on both sides of the Atlantic. Trump has expressed skepticism about aid to Ukraine, and political divisions in the United States could make it difficult to approve further support for Kyiv.
Frozen assets of the Russian Federation
Recall that in response to Russia's full-scale invasion of Ukraine in February 2022, the G7 countries froze about $280 billion in assets of Russian central banks, most of which are held in Europe through the Belgian clearing house Euroclear.
Most European countries oppose outright asset confiscation and are skeptical of proposals that they believe could undermine the stability of the euro or expose them to the risk of Russian retaliation.
