The United States is ready to provide Ukraine with a $50 billion loan at the expense of profits from frozen Russian assets if the European Union extends sanctions against Russia indefinitely.
This was reported by the Financial Times, citing a document that will be discussed today at an online meeting of EU finance ministers, Babel informs.
In general, Washington demands that the EU extend sanctions against Russian state assets, which expire every six months, until the end of the war in Ukraine. This is necessary to ensure that the United States does not remain solely responsible for repayment of loans granted to Ukraine.
But any changes to the EU sanctions regime require the approval of the leaders of all member states. In particular, Hungarian Prime Minister Viktor Orban, who defends his right to veto sanctions.
There is a main option that is currently being considered. This is a plan by the United States to provide Ukraine with a loan, possibly along with other G7 countries, roughly equal to the estimated windfall from hundreds of billions of dollars in frozen Russian assets. Diplomats say the amount could be as high as $50 billion.
The United States is also pushing for an agreement before the G7 summit in Italy on June 13-15.
They expect that the main topic of the meeting will be financial support for Ukraine, in particular through frozen Russian assets. At the same time, the details of the loan, such as maturity, interest rate, whether it will be provided directly or through an intermediary, such as the World Bank, have not yet been determined.
According to the publication, the United States can issue such a loan only if the European Union allocates profits from Russian assets held in EU countries to repay it, and these assets themselves remain frozen “until Russia agrees to pay for the damage caused to Ukraine.”
Such a pledge is crucial, as most of Russia’s assets are held in the Belgian central securities depository Euroclear. These assets generate approximately €3 billion in profit per year. If the profits are not enough to make the required payments or if the EU fails to agree on extending the sanctions, the US will potentially be responsible. For this reason, some EU governments fear the potential financial consequences of such a loan.
Another option is that the EU, along with other G7 countries, would actually provide Ukraine with bilateral loans secured by the proceeds of Russian assets frozen in their own jurisdictions.
