Skip to content
Edit post

FT: G7 developing plans to support Ukraine in securing funds by leveraging Russian assets as financial safety net.

by Dmytro Basmat February 4, 2024 7:59 AM 2 min read
President Volodymyr Zelensky poses for a photo with the G7 leaders, as well as European Union officials, during the G7 summit in Hiroshima, Japan, on May 21, 2023. (President's Office)
This audio is created with AI assistance

Support independent journalism in Ukraine. Join us in this fight.

Become a member Support us just once

Group of Seven (G7) countries are developing strategies to issue debt to support Ukraine, utilizing Russian assets a safety net for repayment, the Financial Times reported on Feb. 3.

According to G7 officials familiar with the discussions, the proposed plan involves Kyiv's allies raising debt to provide financial support for Ukraine and demanding that Russia repays the debt. If Russia does not repay the debt, the countries would then seize frozen Russian assets.

Structuring the debt support in this way would enable allies to raise funds for Ukraine without the immediate need to resolve legal questions about the grounds on which nations could seize Russian assets

“One of the things that this would do is put off the question of what happens to the Russian sovereign assets, even though they would be used as collateral,” an official with knowledge of the negotiations told the Financial Times.

Despite appeals by lawmakers, some countries have been hesitant on the outright seizure of the assets, as such a step carries a number of legal and economic pitfalls. The United States, Germany, and France, as well as the European Central Bank, have also expressed that seizing assets could have financial stability implications.

Earlier this month, U.S. President Joe Biden's administration backed legislation that would allow the confiscation of some frozen Russian funds and funneling them to Ukraine.

“Using the assets as collateral to raise debt is an attempt to find a compromise between different viewpoints around the table, both within the EU and . . . the G7,” an official told FT.

Western countries have immobilized around $300 billion of the Russian central bank's assets since the start of the full-scale invasion. Washington, Brussels, and Kyiv have long discussed legal ways of channeling these funds to aid Ukraine's reconstruction efforts.

G7 nations have pledged that Russian assets held in their jurisdictions would remain frozen until Moscow pays war reparations to Ukraine.

The World Bank assessed early in 2023 that the total cost of Ukraine's reconstruction would amount to $411 billion. Ukrainian Foreign Minister Dmytro Kuleba commented earlier this month that the full amount of Russian assets could cover over 80% of recovery costs.

Bloomberg: Internal documents show White House support for seizing frozen Russian assets
U.S. President Joe Biden’s administration backs legislation that would allow the confiscation of some frozen Russian funds and funneling them to Ukraine, Bloomberg reported on Jan. 10, citing three documents it had obtained.




.

Before you skip this banner, we want to tell you something…

The Kyiv Independent doesn’t depend on a wealthy owner or an oligarch — in 2023, 80% of our revenue was from reader contributions . It’s thanks to them that we don’t have to rely on a single owner.

Support us now and help maintain our independent model and keep our articles free for everyone. Your contributions allow us to cover journalists’ salaries, report from the front lines, and fund projects like our War Crimes Investigations Unit.

visa masterCard americanExpress

News Feed

Ukraine Daily
News from Ukraine in your inbox
Ukraine news
Please, enter correct email address
MORE NEWS

Editors' Picks

Enter your email to subscribe
Please, enter correct email address
Subscribe
* indicates required
* indicates required
Subscribe
* indicates required
* indicates required
Subscribe
* indicates required

Subscribe

* indicates required
Subscribe
* indicates required

Subscribe

* indicates required
Subscribe
* indicates required

Subscribe

* indicates required
Successfuly subscribed
Thank you for signing up for this newsletter. We’ve sent you a confirmation email.