Group of Seven leaders' meeting - The G7 plans to use Russian funds to reinforce Ukraine in the future.
The US and G7 allies are utilizing considerable resources, including financial pledges, security agreements, and sanctions, to bolster Ukraine's strength in the long term. Their objective is to safeguard the nation following Russia's relentless attacks. The seven major industrialized nations have reached a consensus at their summit regarding a billion-dollar credit recorded from frozen Russian state assets. This credit will be repaid with accumulating interest. The purpose of the security agreement is to aid Ukraine in maintaining its defense against ongoing aggression.
The ongoing Ukraine conflict is the primary focus of the initial day of the G7 summit, which encompasses representatives from Italy, Germany, France, the UK, Japan, Canada, and the US. The summit runs until Saturday and is being held at the opulent resort Borgo Egnazia in Apulia.
US in the Forefront of Funding Billion-Dollar Loan:
The US has proposed financing a loan worth $50 billion using proceeds from $280 billion (approximately €260 billion) of Russian central bank funds frozen in Western countries. The discussion has been centered around utilizing this interest for Ukraine's benefit.
German Chancellor Olaf Scholz revealed on Thursday that this loan will allow Ukraine to cover all required military and reconstruction expenditures. He emphasized, "Russian President Vladimir Putin's agenda is transparent: He hopes to endure the war as long as other countries relinquish their support for Ukraine. However, this plan has failed today."
A senior US government official mentioned that the United States is willing to contribute up to $50 billion (approximately €46 billion) to the loan. They asserted, "We won't be the only lenders." Other nations will also contribute. Despite refraining from specifying details, they implied that the amount could potentially be larger. The US official stressed that the loan would be financed solely from Russian funds. It remains to be seen how much Germany will engage.
Based on the World Bank's assessment, war damages have extended beyond $486 billion. The draft of the summit's final declaration states, "Russia's President should not have the authority to determine if or when he pays for the damages he indirectly caused in Ukraine." Consequently, the G7 is still exploring legal methods to compel Russia to fulfill these obligations.
Moscow's Incendiary Response:
The prospective G7 countries' plan spells potential catastrophe, warned the Russian Foreign Ministry spokesperson. "Resorting to stolen Russian funds for the military endeavors of the Kiev regime is a criminal and mercenary act," remarked Maria Zakharova on Thursday. She issued a stern warning to European countries, suggesting that their companies could face potential expropriation in Russia.
The Kremlin initially responded with measured caution. Kreml spokesperson Dmitry Peskov announced they would closely monitor the G7 summit and refrained from commenting on the reported decisions prior to their announcement.
Additional Military Schemes Under a Ten-Year Agreement:
The US proposes a bilateral agreement with Ukraine, lasting for a decade, encompassing military aid, defense industry cooperation, and intelligence information exchange to promote Ukraine's potential NATO membership. The agreement also emphasizes Ukraine's need for reform.
The US is not pledging any specific security guarantees. The agreement does not commit to furnishing particular weapons systems.
US Issues Warning to China:
Before the summit commenced, the US imposed additional sanctions on Russia and its supporters of the war, including Chinese firms. The EU is reportedly planning new sanctions as well. In the final statement of the G7, it calls on China to discontinue supplying goods for military purposes to Russia. The G7 asserts that this assistance allows Moscow to perpetuate its unlawful war in Ukraine and has severe security implications.
China Faces Trade Aggression Threat:
The second day of the summit saw the G7 deliberating on economic security. The final statement denounces China for fostering detrimental overcapacities via non-market practices, including subsidies and market distortions. China was indirectly put on notice for the potential imposition of additional sanctions in response to unfair trade practices.
China was previously criticized by the EU over plans to levy tariffs on electric car imports from China. The US had set the tone earlier. China's Ministry of Commerce countered, denouncing the EU Commission's threat and hinting at reprisals.
