US agrees to contribute up to US$20bn to G7 loan for Ukraine – FT

The United States is ready to provide Ukraine with up to US$20 billion as part of a G7 loan to be repaid from the proceeds generated by frozen Russian assets.

Source: Financial Times, citing three sources; European Pravda

Details: Talks over the loan are gaining momentum, with Western officials eager to release funding to Kyiv before year’s end. They are aware that if Donald Trump wins the US presidential election in November, future US aid to Ukraine risks being cut off.

The Group of Seven (G7) nations have been engaged in months of discussions regarding the framework of the US$50 billion loan agreed upon in June. Recently, it appeared that Washington’s contribution might fall short of initial expectations due to the EU's inability to ensure that Russian assets would remain frozen for a minimum of three years.

However, on Friday, US officials told their G7 counterparts that Washington would provide the full initial amount, about US$20 billion.

They said this would be possible even if the EU failed to persuade Hungarian Prime Minister Viktor Orbán to remove his veto on extending EU sanctions, a condition Washington has demanded.

The G7 finance ministers, meeting in Washington on 25 October on the sidelines of IMF and World Bank meetings, are expected to issue a statement on the allocation and structure of the loan, two people familiar with the matter said.

A source familiar with the negotiations mentioned that a final agreement has yet to be reached as the US continues to discuss repayment details with members of Congress and Ukraine alike.

Background: 

• Last week, the EU approved its contribution of up to €35bn to the G7 loan.
• The majority of the frozen assets belonging to Russia's central bank are held in the EU. They are expected to generate about €3 billion in income per year.
• Recently, Hungary decided not to endorse the EU's decision to extend sanctions on frozen Russian assets for an additional three years ahead of the US presidential election.

Support UP or become our patron!