An American-led plan to accelerate tens of billions of dollars in funding to Ukraine in the event of Donald Trump’s re-election is coming closer to being realized.
Set to be discussed at a summit in June, Washington’s G7 allies have been gradually won over by the plan. With America heading to the polls in November, the proposal is seen as a way of guaranteeing long-term aid for Kyiv in light of Trump’s promise to cut American funding.
Under the scheme, Kyiv would receive money in advance courtesy of a G7 loan. The loan would be secured via future profits generated from 350 billion dollars of Russian assets that have been frozen following 2022’s full-scale invasion.
Previously, some G7 countries had indicated reluctance, with France, Germany, Italy, and Japan fearing that such a move would set a precedent for the seizure of state property and impact the financial markets. As America’s presidential election looms, these countries are now “coming around,” revealed one official.
Already supported by Canada and the U.K., the American plan would see around 50 billion dollars rushed to Kyiv as early as summer.
One unnamed source involved in the negotiation process said that it could “be done before November, so, even if Trump wins, the money will have already been deployed.”
Italy, which currently holds the G7 presidency, has said that the summit will explore how to “maximize the use of windfall profits to ensure the long-term financing of Ukraine.”
A senior U.S. Treasury official expressed cautious optimism about the plan’s adoption on Friday: “I feel there is momentum and there is interest. What we’re involved in is trying to engage in hard, detailed economic diplomacy to make sure we can all get on the same page - and I think we’re making progress there.”
Several details still need to be ironed out; of the potential sticking points, it would need to be decided which country issues the debt: the U.S. or all G7 nations. Moreover, discussions would need to include who would act as guarantor and how the risks and repayment would be shared in the event future profits did not materialize.
The G7 scheme could face additional problems since any plan to leverage profits would require unanimous approval at EU level. In this case, delays could come from countries such as Hungary or Slovakia.
Under the scheme, Kyiv would receive money in advance courtesy of a G7 loan. The loan would be secured via future profits generated from 350 billion dollars of Russian assets that have been frozen following 2022’s full-scale invasion.
Previously, some G7 countries had indicated reluctance, with France, Germany, Italy, and Japan fearing that such a move would set a precedent for the seizure of state property and impact the financial markets. As America’s presidential election looms, these countries are now “coming around,” revealed one official.
Already supported by Canada and the U.K., the American plan would see around 50 billion dollars rushed to Kyiv as early as summer.
One unnamed source involved in the negotiation process said that it could “be done before November, so, even if Trump wins, the money will have already been deployed.”
Italy, which currently holds the G7 presidency, has said that the summit will explore how to “maximize the use of windfall profits to ensure the long-term financing of Ukraine.”
A senior U.S. Treasury official expressed cautious optimism about the plan’s adoption on Friday: “I feel there is momentum and there is interest. What we’re involved in is trying to engage in hard, detailed economic diplomacy to make sure we can all get on the same page - and I think we’re making progress there.”
Several details still need to be ironed out; of the potential sticking points, it would need to be decided which country issues the debt: the U.S. or all G7 nations. Moreover, discussions would need to include who would act as guarantor and how the risks and repayment would be shared in the event future profits did not materialize.
The G7 scheme could face additional problems since any plan to leverage profits would require unanimous approval at EU level. In this case, delays could come from countries such as Hungary or Slovakia.
Source: Financial Times
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