G7 leaders seal $50 billion Ukraine loan deal

G7 leaders reached a consensus Thursday to provide Ukraine with a new $50 billion loan using profits from frozen Russian assets, a move hailed by Ukrainian President Volodymr Zelenskyy but underscored by his plea for additional military assistance.

Italian Prime Minister Giorgia Meloni, hosting the summit in Puglia, announced the financial support following a special session involving US President Joe Biden and leaders from France, Germany, Canada, Japan, and Britain. The aid is slated to be disbursed by year’s end.

“We have reached political agreement to provide additional financial support to Ukraine of approximately $50 billion by the end of the year,” Meloni declared.

Zelenskyy, addressing the summit at Borgo Egnazia resort, expressed gratitude for the pledged funds, noting they would bolster both defense capabilities and reconstruction efforts in Ukraine. However, he pressed for stronger measures, urging the confiscation of Russia’s frozen assets, a move currently resisted by the European Union due to potential economic repercussions.

“We need more air-defense systems to counter Moscow’s relentless attacks,” Zelenskyy emphasized, pointing to ongoing assaults on Ukrainian frontline forces and critical infrastructure.

The loan, structured as a syndicate involving multiple lenders to share risk, marks an escalation in Western support for Ukraine since Russia’s invasion in February 2022. The European Union, effectively the eighth member of the G7, has frozen approximately 300 billion euros ($325 billion) in Russian assets, with expectations of generating billions annually from interest.

German Chancellor Olaf Scholz described the loan agreement as a “historic step,” signaling to Russian President Vladimir Putin that international resolve remains firm.

“This lays the groundwork for Ukraine to secure essential supplies, both in terms of weaponry and infrastructure investment,” Scholz affirmed.

Zelenskyy, continuing his diplomatic efforts, is set to hold a joint press conference with Biden later today and will attend a global peace summit in Switzerland this weekend. In a show of continued solidarity, he signed additional security agreements with Japan and the United States during the summit.

The meeting in Puglia occurs against a backdrop of global unrest, including the Gaza conflict and escalating economic tensions between China and Western nations. With political uncertainties looming, particularly in key G7 states ahead of pivotal elections, the summit aims to navigate multiple geopolitical challenges while strengthening international cooperation.