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G7 Endorses Plan to Channel Frozen Russian Funds to Ukraine Amid EU Disputes
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![Photo of Maryna Kulakova]( "Photo of Maryna Kulakova")
The finance ministers of the Group of Seven (G7) have welcomed the use of frozen Russian assets to pay reparations to Ukraine, according to the G7’s declaration issued on December 8.
“We will continue to work together to develop a wide range of financing options to support Ukraine, including potentially using the full value of the Russian Sovereign Assets, immobilized in our jurisdictions until reparations are paid for by Russia, to end the war and ensure a just and lasting peace in Ukraine,” the statement reads.
The G7 countries further announced that they are prepared to increase pressure on Russia should peace talks fail, and described the “preservation of Ukraine” as a top priority for the agenda during France’s upcoming presidency.
Discussions about providing Ukraine with a €140 billion loan backed by frozen Russian assets have been ongoing since early October. At that time, EU leaders failed to reach an agreement on the loan—Belgium opposed the plan, while France and Luxembourg raised concerns about potential legal consequences.
On December 6, the European Commission officially presented the reparations-loan proposal. The loan would total €165 billion: €25 billion would come from Russia’s frozen state assets held in private banks across the EU, and €140 billion from assets stored at the Belgian financial institution Euroclear.
The funds are expected to be allocated in the following way—€115 billion will finance Ukraine’s defense industry, €50 billion will support Ukraine’s budgetary needs, and €45 billion will be used to repay the loan the G7 provided to Ukraine in 2024.
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Belgium opposes the loan due to concerns that Russia may sue the country if the plan goes ahead, since the frozen assets are held in Belgium’s Euroclear. Belgian Prime Minister Bart De Wever has asked the other 26 EU member states to guarantee coverage of any legal and financial risks.
Previously, France has refused to allow approximately $19.4 billion in frozen Russian central bank assets held at its commercial banks to be used in a proposed European Union “reparations loan” for Ukraine, according to a report by the Financial Times on December 8.
-cd2758dceb3bc0a1e4770e8a7d67f1c4.jpeg "Fortis tanker near Istanbul, September 10, 2024. (Source: VesselFinder)")
