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The G7 has agreed to use frozen Russian assets to raise $50bn (£39bn) for Ukraine to help it fight invading Russian forces.
U.S. President Joe Biden said it was another reminder to Russia that “we will not stand down”, but Moscow threatened “extremely painful” retaliation.
The money is not expected to arrive until the end of the year, but it is seen as a long-term solution to support Ukraine’s war effort and economy.
Also at the G7 summit in Italy, Ukrainian President Volodymyr Zelensky and Biden signed a 10-year bilateral security agreement between Ukraine and the United States, which Kiev called a “historic” agreement.
The agreement envisions the United States providing military and training assistance to Ukraine — but does not commit Washington to sending troops to fight for its ally.
After Russia’s full-scale invasion of Ukraine in 2022, the G7 and the European Union froze assets worth about $325 billion.
The asset generates about $3 billion in interest each year.
According to the G7 plan, the $3 billion will be used to repay the annual interest on Ukraine’s $50 billion loan borrowed on the international market.
President Biden told a joint news conference at the summit venue in the southern Italian region of Puglia that the $50 billion loan would be “for Ukraine and to remind (Russian President Vladimir) Putin once again that we will not back down.”
The US leader stressed that Putin “cannot wait for us to end the war, he cannot divide us, and we will stand with Ukraine until they win this war.”
President Zelensky thanked the United States and other allies for their steadfast support.
“This is a truly historic day as we sign the strongest agreement with the United States since Ukraine’s independence (in 1991),” he said of the new security agreement.
The Group of Seven, which includes Canada, France, Germany, Italy, Japan, Britain and the United States, has been a key economic and military backer of Ukraine in its battle to contain Russian occupation forces.
Other G7 leaders also welcomed the $50 billion loan deal, with British Prime Minister Rishi Sunak calling it a “game-changing agreement.”
Most of the Russian Central Bank’s frozen assets are held in Belgium.
Under international law, countries cannot seize these Russian assets and give them to Ukraine.
Hours before the G7 decision was announced, Russian Foreign Ministry spokeswoman Maria Zakharova warned of “extremely painful” retaliatory measures. (BBC News)
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