Leaders of the major democracies that make up the Group of Seven (G7) reached a preliminary agreement on Thursday to use the interest from Russian sovereign assets that were frozen following Moscow’s 2022 invasion of its neighbour to lend $50 billion to Ukraine.
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The first day of the yearly G7 leaders’ summit in southern Italy focused on the political agreement, which Ukrainian President Volodymyr Zelenskiy attended for the second year. After inking a 10-year security agreement with Japan, he inked a new, long-term security agreement with US President Joe Biden. Tokyo pledged to give Kyiv $4.5 billion this year, demonstrating the West’s unwavering support for Kyiv.
What are the Details?
Reporters were informed by Biden that the deal on frozen assets was a “significant outcome” and that it served as “another reminder to (Russian President Vladimir) Putin that we’re not backing down.” A multi-year loan utilising the earnings from about $300 billion in impounded Russian funds—the majority of which are banned in the European Union—is the foundation of the G7 plan for Ukraine.
The additional funding, which is anticipated to arrive in Kyiv by the end of this year due to donations from all G7 members—the United States, Canada, Britain, France, Germany, Japan, and Italy—will have its technical details confirmed in the upcoming weeks. German Chancellor Olaf Scholz stated this was a very clear commitment that should embolden the Ukrainians to do what they need to defend their independence and sovereignty.
According to someone close to the negotiations, the agreement’s goal is to guarantee that it can continue for years to come regardless of who governs each G7 state. This is a response to worries that, should Donald Trump defeat Biden in November, he may show considerably less support for Kyiv. The European Union will suffer greatly as a result of Moscow’s response, foreign ministry spokeswoman Maria Zakharova said on Thursday. Russia views attempts by the West to extract revenue from its frozen assets as illegal.
What is G7’s Plan for Ukraine?
On Thursday, Volodymyr Zelenskyy, the president of Ukraine, requested that the G7 leaders accept a “Marshall Plan” for rebuilding his country following the destruction wrought by Russia’s invasion. “A detailed plan is required for Ukraine’s rehabilitation. According to a transcript of his address available on the president’s website, he informed the G7 leaders, “Much like the Marshall Plan was for Europe after the war.” Following the Second World War, the United States provided multibillion dollars in economic help to its European allies through the Marshall Plan, which is credited with reviving those regions’ economies following the damage caused by the fighting.
Rebuilding Ukraine is expected to cost up to $500 billion, according to World Bank estimates.
With Russia gaining modest territory this year, the full-scale conflict that began nearly 28 months ago when Moscow dispatched tens of thousands of troops into Ukraine doesn’t appear to be ending anytime soon. Zelenskyy stated that Ukraine now has more defence against airstrikes, especially in the eastern city of Kharkiv, following the recent easing of prohibitions on the use of Western weaponry on targets inside Russia.
What is the G7?
The United States, Canada, France, Germany, Italy, Japan, and the United Kingdom (UK) comprise the informal G7, a group of industrialised democracies that gets together once a year to talk about things like international security, global economic governance, and, most recently, artificial intelligence (AI). The forum’s limited and comparatively homogeneous membership, according to its supporters, encourages group decision-making.
