US Off-G7 Backs Use Of Frozen Russian Asset Interest To Fund Ukraine

Wires reporting comments from an unnamed senior US official speaking at the G7 summit regarding the use of frozen Russian assets to support Ukraine. Says that the G7 has reached an agreement on using the interest from the frozen Russian assets to provide a USD50bn loan to Ukraine. Official: 'There will be multiple disbursement channels for funds...Disbursements will begin in 2024 [and] need to be at a pace the Ukraine can absorb and direct to its highest priorities'.

• Says that the 'next step is to enshrine the committment with other EU members and write contracts...European leaders have committed to seek approval from other EU members to keep Russian assets frozen'. Claims that the assets will remain 'untouched for now', but that the West has 'full optionality' to seize the principal later if there is political will. Official: 'Ukraine will be able to use the funds to support its budget, military, reconstruction, and for humanitarian purposes.'
• The subject of whether or how to use the ~USD290bn in frozen Russian assets (primarily held by Belgium's Euroclear) has been the topic of intense discussion for several months. The US has pushed a hard line in utilising the funds themselves. However, it appears the more cautious Europeans have won through, just using the windfall interest earned on the assets to date as collateral for the loans.
• European figures, notably ECB Pres. Christine Lagarde, have warned the impact using the funds themselves but seem to have becomemore relaxedabout using the windfall interest gained to back Kyiv.