G7 Leaders Reach ‘Political Deal’ on New Ukraine Funds: US

G7 leaders agreed at a summit in Italy Thursday on a new $50-billion loan for Ukraine using profits from frozen Russian assets as collateral, a US official said.

“We have political agreement at the highest levels for this deal,” a senior Biden administration official said on condition of anonymity.

“And it is $50 billion this year that will be committed to Ukraine.”

US President Joe Biden and the leaders of Italy, Britain, France, Germany, Canada and Japan on Thursday began two days of summit talks in Puglia, southern Italy.

Increasing support for Ukraine – now in the third year of its war with Russia – was top of the agenda, with President Volodymyr Zelensky joining for a special session Thursday.

The EU agreed earlier this year to help Kyiv, using the profits from the interest on Russian central bank assets frozen by Western allies.

But the US has been pushing for more and faster help through a massive upfront loan – although it was not clear who would issue the money, and who covered the risk.

The US was willing to provide up to $50 billion, the official said Thursday, but said its contribution could be “significantly less” as it would be a shared initiative.

“We will not be the only lenders. 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.

He would not say how much other G7 countries would contribute, beyond saying that the final summit statement in Puglia would speak of “loans plural.”

Show unity

The G7 countries – which count the European Union as their unofficial eighth member – have been Ukraine's key military and financial backers since Russia invaded in February 2022.

“Today the G7 in Bari will show unity. Unity for Ukraine's freedom,” European Commission President Ursula von der Leyen wrote earlier on X.

Germany's finance minister, Christian Lindner, added: “Good news from the G7: another $50 billion for Ukraine.”

He said it showed Russian President Vladimir Putin our “unity, greatly helps Ukraine and relieves the burden on budgets” – but confirmed the details still needed working out.

French President Emmanuel Macron's office has also said there was agreement, without providing details.

Zelensky, who was due to hold a joint press conference with Biden later Thursday, has been engaged in a flurry of diplomacy aimed at boosting international support.

He spoke earlier this week in Berlin at a reconstruction conference and is set to join more than 90 countries and organizations this weekend for a peace summit in Switzerland.

Zelensky said he would sign two more security agreements with Japan and the United States in Puglia.

The G7 and the EU have frozen some €300 billion ($325 billion) of Russian assets, much of it frozen by Euroclear, an international deposit organization based in Belgium.

EU countries say they could generate between €2.5 and €3.0 billion per year for Kyiv from the profits on the interest.

Irreplaceable role

The summit comes at a time of extraordinary global turmoil.

Apart from the conflict in Ukraine, the Hamas-Israel conflict is raging and economic tensions are rising between China and Western countries.

Many G7 countries are also in political flux. Everyone in Puglia is aware this could be Biden's last G7 summit if he loses to Donald Trump in the November US elections.

Britain's Rishi Sunak is tipped to be ousted in the July 4 elections, while France's Macron and Germany's Olaf Scholz are both under pressure after gains by the far right in EU elections last weekend.

By contrast, meeting host Giorgia Meloni, Italy's prime minister, is riding high after her far-right party topped European Parliament elections last weekend.

Meloni laughed and joked with her G7 counterparts as she welcomed them among the olive trees of the luxury Borgo Egnazia resort and took a selfie with reporters.

But she had a serious message.

“The Group of Seven in recent decades has assumed an irreplaceable role in the management of global crises, especially those that jeopardize our freedom and our democracy,” she told an opening session.

The talks began with a short session on Africa, development and climate change, before turning to the Middle East.

The G7 leaders have already announced their support for a Gaza truce deal outlined by Biden, which would also see the release of hostages taken in Hamas's Oct. 7 attack on Israel.

Another key issue in Puglia, to be discussed Friday, will be concerns about China's so-called “industrial overcapacity,” particularly in green energy and technology sectors such as solar panels and electric vehicles.