US ready to offer $50 bln loan to Ukraine, conditioned on EU extending indefinite sanctions against Russia

The United States is ready to lend Ukraine $50 billion, which will be repaid with profits from frozen Russian assets, provided that the European Union can extend sanctions against Moscow indefinitely.

The Financial Times reports this.

As noted in the publication, the European Union continues sanctions against Russian state assets every six months. Washington, in turn, demands that the EU extend the restrictions on Russian nuclear weapons until the end of the war.

This is necessary so that the US does not remain solely responsible for payments on loans granted to Ukraine.

However, any changes to the EU's sanctions regime would need the approval of all leaders, including Viktor Orbán, who fiercely defends his veto power over sanctions. The US proposal is outlined in an EU discussion prepared for a virtual meeting of the bloc's finance ministers, where they will discuss how to raise funds for Kyiv.

Washington is pushing for a deal ahead of next week's G7 summit in Italy, where a financing mechanism through profits from frozen assets is likely to be a centerpiece of support for Ukraine.

The main option being considered is a US plan to give Ukraine a loan, possibly with other G7 countries, roughly equal to the estimated "surplus profits" from the hundreds of billions of dollars in frozen Russian assets held in the West. Diplomats say it could be up to $50 billion.

For reference:

On February 24, the Group of Seven (G7) countries released a statement confirming that they would keep Russian assets frozen in their jurisdictions until the end of Russia's full-scale war against Ukraine.

It's important to note that the European Union has drafted a legislative proposal to allow Ukraine to begin receiving profits from the frozen assets of the Russian Central Bank as early as July. These funds will be used for the purchase of weapons and the advancement of the defense industry.

On March 19, the Head of Diplomacy of the European Union, Josep Borrell, proposed to use 90% of the revenues from the Russian Federation's assets frozen in Europe to purchase weapons for Ukraine through the European Peace Fund.

On May 8, EU permanent representatives agreed to use the proceeds from frozen Russian assets to support the recovery of Ukraine and its military defense against Russian aggression.

On May 21, the Council of the European Union approved the transfer of revenues from taxable excess profits of frozen Russian assets to Ukraine.

In their turn, the G7 finance ministers supported the idea of ​​providing Ukraine with a loan secured by the profits from frozen Russian assets to ensure the financing of Kyiv after 2024.

According to open information, Euroclear currently has 192 billion euros of Russian Central Bank assets on its balance sheet. The EU is looking for legal mechanisms to deal further with these frozen resources and the interest accrued on them, which has reached €5 billion over the past two years.