G7 leaders to provide $50bn in loans for Ukraine
FASANO – Leaders of the Group of Seven (G7) countries agreed Thursday to provide at least US$50 billion in loans for Ukraine, using interest from Russian sovereign assets frozen since Moscow launched a full-scale invasion of its neighbour more than two years ago, senior US and Japanese officials said.
In addition to Ukraine’s future, a major topic on the first day of their summit in Fasano, southern Italy, was the conflict between Israel and the Palestinian militant group Hamas in the Gaza Strip, with the G7 members having endorsed a cease-fire plan presented by the United States.
The G7 loan deal was struck amid concern over “Ukraine fatigue,” with doubts persisting about how long the United States and other like-minded partners can stand together in supplying Kyiv with weapons and helping it to rebuild destroyed infrastructure.
US President Joe Biden said the Russian invasion that started in February 2022 is “a test” for the world, posing the question of whether it can unite “for sovereignty, freedom, and against tyranny.”
“The United States, the G7 and countries around the world have consistently answered the question by saying, ‘Yes, we will.’ We will say it again. Yes, again and again and again, we’re going to stand with Ukraine,” Biden said at a joint press conference with Ukrainian President Volodymyr Zelenskyy, who was invited to the summit as a guest.
The United States has committed to the extension of up to $50 billion in loans, a senior Biden administration official said, adding it will “not be the only” lender.
“This will be a loan syndicate. We’re going to share the risk because we have a shared commitment to get this done,” the official said.
According to a Japanese official, Prime Minister Fumio Kishida explained to his G7 counterparts that his nation’s funding will not be used for military purposes given its war-renouncing Constitution.
The official, however, refrained from providing details on the new lending scheme. He said the leaders “are planning to make some kind of announcement” related to the plan in their communique expected to be released Friday.
The G7 has imposed a series of economic sanctions on Moscow, including asset freezes, since the invasion began. The US official, who previewed the deal on condition of anonymity, did not disclose which G7 members will be part of the new initiative.
A G7 source said Japan, Britain and Canada are expected to join the US-led scheme, while France, Germany and Italy are unlikely to participate for the time being as the European Union already has a similar support plan.
Ukraine will not have to repay up to $50 billion of the loans, which it will start receiving this year from the group of the world’s leading industrialised democracies, as Russia will ultimately end up shouldering the cost, according to the US official.
A Ukrainian serviceman of the 33rd Separate Mechanised Brigade prepares to fire a M2 Browning machine gun atop a Mine Resistant Ambush Protected (MRAP) vehicle Oshkosh M-ATV during a military drill near a frontline, amid Russia’s attack on Ukraine, in Donetsk region, Ukraine, on Wednesday. (Photo: Reuters)
The G7, along with Australia, has frozen about $280 billion of Russian sovereign assets, as well as around $58 billion of those belonging to individuals, companies and organisations of the nation, according to the Japanese government.
Kishida’s government has focused on providing support for Ukraine’s reconstruction within the scope of Japan’s Constitution, such as demining cooperation and the provision of nonlethal defence equipment.
At the summit’s opening session, Kishida emphasised the significance of maintaining a free and open international order based on the rule of law, as well as bolstering relations with developing and emerging countries in the “Global South,” Japan’s Foreign Ministry said.
Both “have become increasingly important as we face new challenges, including Russia’s continued aggression against Ukraine and heightened tensions in the Middle East,” Kishida was quoted by the ministry as saying.
Regarding Ukraine, Kishida said Japan is considering imposing sanctions on foreign companies and groups over the export of products to Russia via third countries that could be diverted to military use, according to the ministry.
The measure would be carried out with specific entities based in China, India, Kazakhstan, the United Arab Emirates (UAE) and Uzbekistan in mind, it said.
The World Bank has estimated the cost of rebuilding Ukraine at $486 billion over the next decade, which Ukraine is likely to fund through loans, representing business opportunities for companies from Japan and around the world.
As for the prolonged conflict between Israel and Hamas, Biden made public a three-stage cease-fire plan to end the war in late May, saying it had been proposed by Israel, traditionally supported by the United States.
The United Nations (UN) Security Council endorsed the plan earlier this month, but US Secretary of State Antony Blinken said Wednesday that Hamas had proposed numerous changes, describing some as unworkable.
International pressure has been mounting on Israel to stop its military campaign in Gaza, which has displaced many Palestinians and caused severe shortages of food, water and energy.
The G7 has condemned the “terrorist” attacks conducted by Hamas on Oct 7 that triggered the ongoing Israeli offensive in the Gaza Strip, while avoiding criticising Israel directly.
Source – Bangkok News
