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G7 leaders agree to lend Ukraine billions backed by Russia's frozen assets. Here's how it will work

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G7 leaders agree to lend Ukraine billions backed by Russia's frozen assets. Here's how it will work
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G7 leaders agree to lend Ukraine billions backed by Russia's frozen assets. Here's how it will work

2024-06-15 03:46 Last Updated At:03:50

WASHINGTON (AP) — Leaders of the Group of Seven wealthy democracies have agreed to engineer a $50 billion loan to help Ukraine in its fight for survival. Interest earned on profits from Russia’s frozen central bank assets would be used as collateral.

Details of the deal were being hashed out by G7 leaders at their summit in Italy. The money could reach Kyiv before the end of the year, according to U.S. and French officials.

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U.S. President Joe Biden, right, and Ukraine's President Volodymyr Zelenskyy talk to journalists during a news conference after signing a bilateral security agreement during the sidelines of the G7 summit at Savelletri, Italy, Thursday, June 13, 2024. (AP Photo/Andrew Medichini)

WASHINGTON (AP) — Leaders of the Group of Seven wealthy democracies have agreed to engineer a $50 billion loan to help Ukraine in its fight for survival. Interest earned on profits from Russia’s frozen central bank assets would be used as collateral.

President Joe Biden and Ukrainian President Volodymyr Zelenskyy, left, leave after signing a bilateral security agreement on the sidelines of the G7, Thursday, June 13, 2024, in Savelletri, Italy. (AP Photo/Alex Brandon)

President Joe Biden and Ukrainian President Volodymyr Zelenskyy, left, leave after signing a bilateral security agreement on the sidelines of the G7, Thursday, June 13, 2024, in Savelletri, Italy. (AP Photo/Alex Brandon)

President Joe Biden and Ukrainian President Volodymyr Zelenskyy, left, shake hands after signing a security agreement on the sidelines of the G7, Thursday, June 13, 2024, in Savelletri, Italy. (AP Photo/Alex Brandon)

President Joe Biden and Ukrainian President Volodymyr Zelenskyy, left, shake hands after signing a security agreement on the sidelines of the G7, Thursday, June 13, 2024, in Savelletri, Italy. (AP Photo/Alex Brandon)

Ukraine's President Volodymyr Zelenskyy talks to journalists during a news conference after signing a bilateral security agreement with U.S. President Joe Biden during the sidelines of the G7 summit at Savelletri, Italy, Thursday, June 13, 2024. (AP Photo/Andrew Medichini)

Ukraine's President Volodymyr Zelenskyy talks to journalists during a news conference after signing a bilateral security agreement with U.S. President Joe Biden during the sidelines of the G7 summit at Savelletri, Italy, Thursday, June 13, 2024. (AP Photo/Andrew Medichini)

U.S. President Joe Biden listens to a question during a news conference after signing a bilateral security agreement with Ukraine's President Volodymyr Zelenskyy during the sidelines of the G7 summit at Savelletri, Italy, Thursday, June 13, 2024. (AP Photo/Andrew Medichini)

U.S. President Joe Biden listens to a question during a news conference after signing a bilateral security agreement with Ukraine's President Volodymyr Zelenskyy during the sidelines of the G7 summit at Savelletri, Italy, Thursday, June 13, 2024. (AP Photo/Andrew Medichini)

From left, European Council President Charles Michel, German Chancellor Olaf Scholz, Canada's Prime Minister Justin Trudeau, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, U.S. President Joe Biden, Japan's Prime Minister Fumio Kishida, Britain's Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen participate in a working session at the G7, Thursday, June 13, 2024, in Borgo Egnazia, Italy. (AP Photo/Alex Brandon, Pool)

From left, European Council President Charles Michel, German Chancellor Olaf Scholz, Canada's Prime Minister Justin Trudeau, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, U.S. President Joe Biden, Japan's Prime Minister Fumio Kishida, Britain's Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen participate in a working session at the G7, Thursday, June 13, 2024, in Borgo Egnazia, Italy. (AP Photo/Alex Brandon, Pool)

U.S. President Joe Biden arrives to a G7 world leaders summit at Borgo Egnazia, Italy, Thursday, June 13, 2024. (AP Photo/Luca Bruno)

U.S. President Joe Biden arrives to a G7 world leaders summit at Borgo Egnazia, Italy, Thursday, June 13, 2024. (AP Photo/Luca Bruno)

From left, European Council President Charles Michel, German Chancellor Olaf Scholz, Canada's Prime Minister Justin Trudeau, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, U.S. President Joe Biden, Japan's Prime Minister Fumio Kishida, Britain's Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen stand for a group photo at the G7, Thursday, June 13, 2024, in Borgo Egnazia, Italy. (AP Photo/Alex Brandon)

From left, European Council President Charles Michel, German Chancellor Olaf Scholz, Canada's Prime Minister Justin Trudeau, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, U.S. President Joe Biden, Japan's Prime Minister Fumio Kishida, Britain's Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen stand for a group photo at the G7, Thursday, June 13, 2024, in Borgo Egnazia, Italy. (AP Photo/Alex Brandon)

Ukrainian President Volodymyr Zelenskyy walks, on arrival at the G7, in Borgo Egnazia, Italy, Thursday, June 13, 2024, (Sean Kilpatrick/The Canadian Press via AP)

Ukrainian President Volodymyr Zelenskyy walks, on arrival at the G7, in Borgo Egnazia, Italy, Thursday, June 13, 2024, (Sean Kilpatrick/The Canadian Press via AP)

U.S. President Joe Biden meets with Ukrainian President Volodymyr Zelenskyy in Paris, Friday, June 7, 2024. (AP Photo/Evan Vucci)

U.S. President Joe Biden meets with Ukrainian President Volodymyr Zelenskyy in Paris, Friday, June 7, 2024. (AP Photo/Evan Vucci)

President Joe Biden arrives on Air Force One at Brindisi International Airport, Wednesday, June 12, 2024, in Brindisi, Italy. (AP Photo/Alex Brandon)

President Joe Biden arrives on Air Force One at Brindisi International Airport, Wednesday, June 12, 2024, in Brindisi, Italy. (AP Photo/Alex Brandon)

President Joe Biden told reporters at a news conference Thursday that the move was part of a “historic agreement.” Ukraine's president, Volodymyr Zelenskyy, said providing a loan through Russia's assets "is a vital step forward in providing sustainable support for Ukraine in winning this war."

Here's how the plan would work:

Most of the money would be in the form of a loan mostly guaranteed by the U.S. government, backed by profits being earned on roughly $260 billion in immobilized Russian assets. The vast majority of that money is held in European Union nations.

A French official said the loan could be “topped up” with European money or contributions from other countries. The White House said Canada will loan Ukraine up to $5 billion, while European countries have expressed interest in sending as much as half of the total package. Japan has also said it intends to help fund Ukraine — though its laws require the money to go to Ukraine’s budget, not its war effort.

The G7 leaders' official statement also left the door open to trying to confiscate the Russian assets entirely.

That's much harder to do.

For more than a year, officials from multiple countries have debated the legality of confiscating the money and sending it to Ukraine.

The U.S. and its allies immediately froze whatever Russian central bank assets they had access to when Moscow invaded Ukraine in 2022. That basically was money being held in banks outside Russia.

The assets are immobilized and cannot be accessed by Moscow, but they still belong to Russia.

While governments can generally freeze property or funds without difficulty, turning them into forfeited assets that can be used for the benefit of Ukraine requires an extra layer of judicial procedure, including a legal basis and adjudication in a court.

The EU instead has set aside the profits being generated by the frozen assets. That pot of money is easier to access.

Separately, the U.S. this year passed a law called the REPO Act — short for the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act — that allows the Biden administration to seize $5 billion in Russian state assets in the U.S. and use them for the benefit of Kyiv. That arrangement is being worked out.

It will be up to technical experts to work through the details.

Ukraine will be able to spend the money in several areas, including for military, economic and humanitarian needs and reconstruction, the U.S. official said.

Biden's national security adviser, Jake Sullivan, said the goal is “to provide the necessary resources to Ukraine now for its economic energy and other needs so that it's capable of having the resilience necessary to withstand Russia's continuing aggression.”

Another goal is to get the money to Ukraine quickly.

The French official, who was not authorized to be publicly named according to French presidential policy, said the details could be worked out "very quickly and in any case, the $50 billion will be disbursed before the end of 2024.”

Beyond the costs of the war, the needs are great.

The World Bank’s latest damage assessment of Ukraine, released in February, estimates that costs for reconstruction and recovery of the nation stand at $486 billion over the next 10 years.

The move to unlock Russia's assets comes after there was a long delay in Washington by Congress in approving military aid for Ukraine.

At an Atlantic Council event previewing the G7 summit, a former U.S. ambassador to Ukraine, John Herbst, said “the fact that American funding is not quite reliable is a very important additional reason to go that route.”

If Russia regained control of its frozen assets or if the immobilized funds were not generating enough interest to pay back the loan, "then the question of burden-sharing arises,” according to the French official.

Max Bergmann, director of the Europe, Russia and Eurasia Program at the Center for Strategic and International Studies, said last week that there were worries among European finance ministers that their countries “will be left holding the bag if Ukraine defaults.”

Some nations are critical of the plan to seize Russian assets.

Chinese Embassy spokesman Liu Pengyu told The Associated Press that the U.S. is "fueling the fight and inciting confrontation.”

“We urge the U.S. to immediately stop slapping illegal unilateral sanctions and play a constructive role in ending the conflict and restoring peace.”

Associated Press writers Sylvie Corbet in Paris, Darlene Superville in Fasano, Italy, and Colleen Long aboard Air Force One en route to Italy contributed to this report.

U.S. President Joe Biden, right, and Ukraine's President Volodymyr Zelenskyy talk to journalists during a news conference after signing a bilateral security agreement during the sidelines of the G7 summit at Savelletri, Italy, Thursday, June 13, 2024. (AP Photo/Andrew Medichini)

U.S. President Joe Biden, right, and Ukraine's President Volodymyr Zelenskyy talk to journalists during a news conference after signing a bilateral security agreement during the sidelines of the G7 summit at Savelletri, Italy, Thursday, June 13, 2024. (AP Photo/Andrew Medichini)

President Joe Biden and Ukrainian President Volodymyr Zelenskyy, left, leave after signing a bilateral security agreement on the sidelines of the G7, Thursday, June 13, 2024, in Savelletri, Italy. (AP Photo/Alex Brandon)

President Joe Biden and Ukrainian President Volodymyr Zelenskyy, left, leave after signing a bilateral security agreement on the sidelines of the G7, Thursday, June 13, 2024, in Savelletri, Italy. (AP Photo/Alex Brandon)

President Joe Biden and Ukrainian President Volodymyr Zelenskyy, left, shake hands after signing a security agreement on the sidelines of the G7, Thursday, June 13, 2024, in Savelletri, Italy. (AP Photo/Alex Brandon)

President Joe Biden and Ukrainian President Volodymyr Zelenskyy, left, shake hands after signing a security agreement on the sidelines of the G7, Thursday, June 13, 2024, in Savelletri, Italy. (AP Photo/Alex Brandon)

Ukraine's President Volodymyr Zelenskyy talks to journalists during a news conference after signing a bilateral security agreement with U.S. President Joe Biden during the sidelines of the G7 summit at Savelletri, Italy, Thursday, June 13, 2024. (AP Photo/Andrew Medichini)

Ukraine's President Volodymyr Zelenskyy talks to journalists during a news conference after signing a bilateral security agreement with U.S. President Joe Biden during the sidelines of the G7 summit at Savelletri, Italy, Thursday, June 13, 2024. (AP Photo/Andrew Medichini)

U.S. President Joe Biden listens to a question during a news conference after signing a bilateral security agreement with Ukraine's President Volodymyr Zelenskyy during the sidelines of the G7 summit at Savelletri, Italy, Thursday, June 13, 2024. (AP Photo/Andrew Medichini)

U.S. President Joe Biden listens to a question during a news conference after signing a bilateral security agreement with Ukraine's President Volodymyr Zelenskyy during the sidelines of the G7 summit at Savelletri, Italy, Thursday, June 13, 2024. (AP Photo/Andrew Medichini)

From left, European Council President Charles Michel, German Chancellor Olaf Scholz, Canada's Prime Minister Justin Trudeau, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, U.S. President Joe Biden, Japan's Prime Minister Fumio Kishida, Britain's Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen participate in a working session at the G7, Thursday, June 13, 2024, in Borgo Egnazia, Italy. (AP Photo/Alex Brandon, Pool)

From left, European Council President Charles Michel, German Chancellor Olaf Scholz, Canada's Prime Minister Justin Trudeau, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, U.S. President Joe Biden, Japan's Prime Minister Fumio Kishida, Britain's Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen participate in a working session at the G7, Thursday, June 13, 2024, in Borgo Egnazia, Italy. (AP Photo/Alex Brandon, Pool)

U.S. President Joe Biden arrives to a G7 world leaders summit at Borgo Egnazia, Italy, Thursday, June 13, 2024. (AP Photo/Luca Bruno)

U.S. President Joe Biden arrives to a G7 world leaders summit at Borgo Egnazia, Italy, Thursday, June 13, 2024. (AP Photo/Luca Bruno)

From left, European Council President Charles Michel, German Chancellor Olaf Scholz, Canada's Prime Minister Justin Trudeau, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, U.S. President Joe Biden, Japan's Prime Minister Fumio Kishida, Britain's Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen stand for a group photo at the G7, Thursday, June 13, 2024, in Borgo Egnazia, Italy. (AP Photo/Alex Brandon)

From left, European Council President Charles Michel, German Chancellor Olaf Scholz, Canada's Prime Minister Justin Trudeau, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, U.S. President Joe Biden, Japan's Prime Minister Fumio Kishida, Britain's Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen stand for a group photo at the G7, Thursday, June 13, 2024, in Borgo Egnazia, Italy. (AP Photo/Alex Brandon)

Ukrainian President Volodymyr Zelenskyy walks, on arrival at the G7, in Borgo Egnazia, Italy, Thursday, June 13, 2024, (Sean Kilpatrick/The Canadian Press via AP)

Ukrainian President Volodymyr Zelenskyy walks, on arrival at the G7, in Borgo Egnazia, Italy, Thursday, June 13, 2024, (Sean Kilpatrick/The Canadian Press via AP)

U.S. President Joe Biden meets with Ukrainian President Volodymyr Zelenskyy in Paris, Friday, June 7, 2024. (AP Photo/Evan Vucci)

U.S. President Joe Biden meets with Ukrainian President Volodymyr Zelenskyy in Paris, Friday, June 7, 2024. (AP Photo/Evan Vucci)

President Joe Biden arrives on Air Force One at Brindisi International Airport, Wednesday, June 12, 2024, in Brindisi, Italy. (AP Photo/Alex Brandon)

President Joe Biden arrives on Air Force One at Brindisi International Airport, Wednesday, June 12, 2024, in Brindisi, Italy. (AP Photo/Alex Brandon)

PARIS (AP) — Tennis star Coco Gauff will join LeBron James as a flag bearer for the U.S. Olympic team at Friday's opening ceremony.

Gauff, the reigning U.S. Open champion, is set to make her Olympic debut at the Paris Games and will be the first tennis athlete to carry the U.S. flag. She and James were chosen by Team USA athletes.

The 20-year-old Gauff made the American team for the Tokyo Games three years ago as a teenager but had to sit out those Olympics because she tested positive for COVID-19 right before she was supposed to fly to Japan.

Now Gauff, who is based in Florida, is a Grand Slam title winner in singles and doubles. She won her first major championship in New York in September, defeating Aryna Sabalenka in the singles final of the U.S. Open, then added her first Grand Slam doubles trophy at the French Open this June alongside Katerina Siniakova of the Czech Republic.

The same clay courts at Roland Garros used for the French Open will be where matches are going to be held for the Paris Olympics. The draw to set the brackets is Thursday, and play begins on Friday.

Gauff is seeded No. 2 in singles, matching her current WTA ranking behind No. 1 Iga Swiatek of Poland, and will be among the medal favorites.

She and her usual doubles partner, Jessica Pegula, are seeded No. 1 in women's doubles. It's possible Gauff could also be entered in mixed doubles, but those pairings have not been announced yet.

AP Olympics: https://apnews.com/hub/2024-paris-olympic-games

FILE - Coco Gauff of the U.S. plays a shot against Poland's Iga Swiatek during their semifinal match of the French Open tennis tournament at the Roland Garros stadium in Paris, Thursday, June 6, 2024. (AP Photo/Jean-Francois Badias, File)

FILE - Coco Gauff of the U.S. plays a shot against Poland's Iga Swiatek during their semifinal match of the French Open tennis tournament at the Roland Garros stadium in Paris, Thursday, June 6, 2024. (AP Photo/Jean-Francois Badias, File)

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