(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.

The agreement, announced on Wednesday evening by Paris, already seems sealed: “Good news from the G7: 50 billion dollars more for Ukraine,” German Finance Minister Christian Lindner wrote on X.

According to Paris, an agreement in principle has already been concluded “on the disbursement of 50 billion” dollars “before the end of 2024”.

This loan “is essentially American”, but “can be supplemented with European money or national contributions”, indicated the French presidency.

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,” explained the Élysée.

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 some 300 billion euros of assets of the Russian central bank, according to the EU. They have also seized private assets of people linked to the Russian government.

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 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, Austria 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 persist 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 evolution of interest rates or even the fact of know who will issue the debt.

According to White House national security adviser Jake Sullivan, delegations are still working out the details, including the financial mechanism used.

“The broad outlines have been decided, but some details still need to be clarified by experts on a precise timetable,” he explained on Thursday.

Another pitfall, Japan’s hands are tied by its constitution which prohibits it from financing the military spending of third countries, which would limit a loan to Kyiv’s budgetary needs only.

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.  

And Russia is threatening retaliation against Western private interests. Vladimir Putin thus signed a decree at the end of May authorizing the confiscation in Russia of assets belonging to the United States or to people “associated” with it.