The G7 has agreed to use frozen Russian assets to raise $50 billion (£39 billion) for Ukraine to aid in its fight against invading Russian forces.
US President Joe Biden emphasized that this move serves as a reminder to Russia “that we’re not backing down,” while Moscow has threatened “extremely painful” retaliatory measures.
At the G7 summit in Italy, Ukrainian President Volodymyr Zelensky and President Biden signed a 10-year bilateral security deal between Ukraine and the US, described by Kyiv as “historic.” The agreement includes US military and training aid to Ukraine, though it does not commit Washington to sending troops.
According to the White House, the deal aims to build and maintain Ukraine’s defense capabilities, bolster its defense industrial base, and support economic recovery and energy security. It also ensures consultation “at the highest levels” in the event of a future Russian attack to determine necessary support measures and impose costs on Russia.
Separately, the G7, along with the EU, has frozen around $325 billion worth of Russian assets following Russia’s full-scale invasion of Ukraine in 2022. These assets generate about $3 billion annually in interest. Under the G7 plan, this interest will cover the annual payments on the $50 billion loan for Ukraine, which will be sourced from international markets.
The funds are expected to be available by the end of the year and are intended to support Ukraine’s war effort and economy in the long term.
Speaking at a joint news conference in Puglia, southern Italy, President Biden said the $50 billion loan would “put that money to work for Ukraine and send another reminder to [Russian President Vladimir] Putin that we’re not backing down.” He stressed that Mr. Putin “cannot wait us out, he cannot divide us, and we’ll be with Ukraine until they prevail in this war.”
President Zelensky expressed gratitude for the unwavering support from the US and other allies. Regarding the new security deal, he stated, “It’s a truly historic day, and we have signed the strongest agreement between Ukraine and the US since our independence [in 1991].”
The G7 nations—Canada, France, Germany, Italy, Japan, the UK, and the US—have been crucial financial and military supporters of Ukraine. UK Prime Minister Rishi Sunak described the $50 billion loan deal as “game-changing.”
A senior White House official mentioned that the G7-agreed fund will have “multiple” uses, including “military support, budget support, humanitarian support, and reconstruction support.” The fund structure will offer flexibility, allowing some countries to allocate funds for budget and reconstruction support, while others earmark theirs for military support.