Washington is drew up a plan for emergency financing of Ukraine before the possible return of Donald Trump to the White House after the US elections this fall, writes the Financial Times. What does this plan provide?
Washington's G7 allies tend to support the US plan to urgently release tens of billions of dollars to Ukraine before the eventual return of Donald Trump to the White House, writes the Financial Times.
What exactly is it about?
According to the plan, which will be discussed at the summit in June, Kiev will receive advance money from a loan to be taken by the G7 countries. The loan will be secured by the future earnings of about $350 billion in Russian assets that were frozen by the West in response to Russia's invasion of Ukraine.
Some of the G7 members were reluctant to approve the plan, but after diplomatic pressure from the US they changed their position, the publication claimed, citing eight of its unnamed sources. Apparently, Washington is trying to reach an agreement at the G7 leaders' summit next month, writes the Financial Times.
The goal is to allocate about 50 billion dollars to Ukraine this summer, which will be generated by this plan, American representatives told the publication. The funding will come at a key time for Kiev - as the country tries to hold its defense lines amid a renewed Russian offensive following a delay in Western military aid deliveries.
The more reserved members of the G7 supported the plan as a way to secure long-term funding for Kiev if Joe Biden loses the presidential election later this year and Trump, who opposes US aid, becomes US head of state again for Ukraine. Everything must be done "before November, so even if Trump wins the election, the money will already be provided to Kiev,", one of the participants in the discussions was quoted as saying.
Representatives of Italy, which holds the rotating G7 presidency, have confirmed that the use of frozen Russian assets to provide long-term financing for Ukraine will be one of the topics of the summit next month. Next week, the issue will be discussed by the finance ministers and central bank governors of the G7 countries, who will make a recommendation to the leaders for their meeting in June.
The US wants to include in the joint statement from the meeting in Italy a text that mentions the use of the proceeds of Russian state assets. Washington has already secured the support of Canada and the United Kingdom for the plan, Western representatives have confirmed, writes the Financial Times.
France, Germany, Italy and Japan have opposed even bolder US plans, such as seizing Russia's core assets, fearing it could set a precedent for seizing state property and wreak havoc on financial markets. markets. According to officials, in recent weeks they have softened their position a bit and are now more open to the idea of using leverage to generate loans for Ukraine, we read more in the post.
Some details are still being negotiated, including who will issue the debt - the US or all G7 countries through a special entity, who will guarantee it and how risks will be shared in the event that profits are not realized.
There may be insurmountable difficulties
As the Financial Times recalls, earlier this month EU countries agreed to use part of the profits from frozen Russian assets to jointly purchase weapons for Ukraine. Under this plan, the Belgian central securities depository Euroclear, where most of the Russian state assets affected by the sanctions are frozen, will pay out the first tranche of profits as early as July.
According to officials in Brussels, the G-7 plan may run into insurmountable difficulties. This means that the use of asset gains needs a new unanimous decision at EU level, and countries such as Hungary can delay or block implementation.