(Paris) $50 billion by the end of 2024 for Ukraine: G7 countries plan to grant a megaloan to Kyiv, guaranteed by future interest generated by frozen Russian assets, even if certain aspects of the agreement still remain blurry.

Less than an hour after Ukrainian President Volodymyr Zelensky arrived at the G7 summit, the White House confirmed Thursday that it had reached a “political agreement” on using frozen Russian assets to release $50 billion for Ukraine.

“We have a political agreement at the highest level […] and $50 billion will be spent on Ukraine,” said a senior US administration official.

The agreement announced on Wednesday evening by Paris already seemed sealed, German Finance Minister Christian Lindner having announced “50 billion dollars more for Ukraine” on X in the morning.

Among the questions to be clarified, however, remain the guarantees of this loan and the distribution of the burden if “Russian assets are unfrozen” or if their “income no longer produces what is necessary to finance the loan”, detailed the Élysée on Wednesday. .

After advocating a pure and simple confiscation of Russian assets, the United States has now aligned itself with the European position of using only the interest generated by the frozen assets.

The European Union and G7 countries have frozen €300 billion in assets of Russia’s central bank, according to the EU. They also seized private assets of people linked to Russian power.  

According to the Institute of Legislative Ideas, a Ukrainian think tank which claims to question official sources, $397 billion is tied up.

The World Bank, for its part, estimates the cost of rebuilding Ukraine at more than $486 billion.

Especially in the European Union: around 185 billion euros were frozen by Euroclear, an international money depository established in Belgium.

This gives preponderant weight to Europe over the use of Russian assets.

The rest is mainly shared between the United States, Japan, the United Kingdom and Switzerland.

Concerning a confiscation of Russian assets themselves, mentioned by the United States, the West came up against “immunity from execution”, a legal principle which prevents the seizure of the property of one State by another.

Keen to avoid violating international law, EU countries adopted an agreement in early May to seize revenues from frozen Russian assets alone in order to arm Ukraine, a windfall worth between 2.5 and 3 billion euros per year.

In the process, the big financiers of the G7 meeting in Stresa at the end of May agreed on the principle of using the future interests of Russian assets.

However, many questions remain regarding the G7 loan guaranteed by the interests of Russian assets, such as the sharing of risk between the United States and Europe, the unknown of the evolution of interest rates and even the participants.

The United States is “willing to lend up to $50 billion to ensure the $50 billion target is met, but there will be other lenders, meaning the true US figure is lower,” he explained. a White House official Thursday, adding that “we’re going to share the risk.”

The share of each country in this loan is not yet known. “I am not going to speak for the other delegations, it is up to them to say if they will contribute,” he added, specifying also that there would be “loans” and not just one.

EU sanctions imposed on Russia, including the immobilization of Russian assets, must be renewed every six months by a unanimous vote of the Council.

A possible veto by nationalist Prime Minister Viktor Orban, who remains close to the Kremlin, could therefore block the mechanism, especially since Hungary will assume the presidency of the European Union on July 1.

And what would happen if the assets were released in the event of a peace agreement?

G7 finance ministers reaffirmed that Moscow’s assets “will remain tied up until Russia pays for the damage it has caused to Ukraine.” Hence the prospect that Russian assets could generate profits for a long time to come.

Some also worry about an impact on investments from third countries, such as China, which could reduce their assets in Western countries for fear of them being seized.  

Also a subject of fear is Russia’s threat of retaliation against Western private interests.