G-7 leaders strike deal on using Russian assets for $68b loan to Ukraine
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World leaders take a family photo at the outset of the annual G-7 summit, in Savelletri, Italy on June 13, 2024.
PHOTO: NYTIMES
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BARI, Italy - Leaders of the Group of Seven (G-7) major democracies agreed to an outline deal on June 13 to provide US$50 billion (S$68 billion) of loans for Ukraine using interest from Russian sovereign assets frozen after Moscow launched its invasion of its neighbour in 2022.
The political agreement was the centrepiece of the opening day in southern Italy of the annual summit of G-7 leaders, attended for a second successive year by Ukrainian President Volodymyr Zelensky.
The Ukrainian leader will sign a new, long-term security accord with US President Joe Biden on June 13, as well as one with G-7 member Japan.
Many of the G-7 leaders are struggling at home but determined to make a difference on the world stage as they also seek to counter China’s economic ambitions.
“There is a lot of work to be done, but I am sure that in these two days we will be able to have discussions that will lead to concrete and measurable results,” Italian Prime Minister Giorgia Meloni told her G-7 guests as their talks started in a luxury hotel resort in the southern region of Puglia.
The G-7 plan for Ukraine is based on a multi-year loan using profits from some US$300 billion of impounded Russian funds.
The technical details will be finalised in the coming weeks, a G-7 diplomatic source told Reuters. The source, who asked not to be named, said the additional funding would arrive by the end of 2024.
A senior US official said the United States had agreed to provide up to US$50 billion itself, but that amount could decline significantly as other countries announced their participation.
The aim of the deal was to ensure it can run for years regardless of who is in power in each G-7 state – a nod to concerns that US Republican presidential candidate Donald Trump might be much less sympathetic to Kyiv if he beats Mr Biden in November, according to a person close to the talks.
The G-7 leaders also expressed their concerns about the situation on the Israel-Lebanon border and endorsed US efforts to secure a ceasefire in the Gaza Strip, according to a draft communique due to be released following the summit.
In addition, they called on Israel to refrain from a full-scale offensive in the southern Gaza city of Rafah, “in line with their obligations under international law”.
Western nations were also unanimous in their concern over China’s industrial overcapacity, which they say is distorting global markets, and their determination to help African states develop their economies, diplomats said.
The G-7 may have a very different complexion in 2025.
Ukrainian President Volodymyr Zelensky and US President Joe Biden signing a security agreement after a bilateral meeting on the sidelines of the G7 summit in Italy on June 13.
PHOTO: EPA-EFE
While Ms Meloni is flying high after triumphing in weekend European elections, the leaders of the other six nations – the US, Japan, France, Germany, Britain and Canada – face major domestic woes that risk undermining their authority.
Mr Biden faces an uphill battle to win re-election in November; British Prime Minister Rishi Sunak looks certain to lose power at a July 4 national poll; and French President Emmanuel Macron dissolved his country’s Parliament on June 9 after his party was trounced in the European vote.
All smiled broadly as they greeted Ms Meloni under a blazing sun at the entrance to the Borgo Egnazia resort, where they will spend two days in sessions that will later be opened to a host of fellow leaders, including Pope Francis.
Eager not to appear like an elitist fortress, the G-7 has thrown open its doors to a large number of outsiders in 2024, including the Pope, who is expected to give a keynote speech on June 14 on both the risks and potential of artificial intelligence.
Among those who have also been invited to Puglia are the leaders of some of the biggest regional powers across the globe such as India, Brazil, Argentina, Turkey, Algeria and Kenya.
Although the summit is scheduled to run until June 15, many G-7 chiefs will leave on June 14 at night, including Mr Biden, meaning the final day has been earmarked for bilateral meetings for those staying on and a final news conference from Ms Meloni. REUTERS
