US President Joe Biden confirmed reaching an agreement with French President Emmanuel Macron regarding the use of profits generated by frozen Russian assets in the West to support Ukraine, according to Reuters.
The funds in question are primarily held in the EU, with around 260 billion euros ($280.9 billion) of Russian central bank assets frozen worldwide. This money can be used for the reconstruction of Ukraine right now, but the West hesitates to provide it to Ukraine.
According to Reuters, the Group of Seven (G7) nations and the European Union (EU) are exploring ways to use these profits, estimated to be between 2.5 billion ($2.6 billion) and 3.5 billion euros ($3.7 billion) annually, to provide Ukraine with a “large up-front loan” and secure its financing for 2025.
The US-backed proposal aims to use the annual profits as a consistent revenue stream to service a potential $50 billion loan that could be raised on the market. However, Russia claims that any diversion of profits from its frozen assets is considered theft, Reuters reports.
On 4 June, a senior US Treasury official said that the US and its G7 partners are making progress on finding ways to provide Ukraine with urgently needed funds by using Russian frozen assets.
The West hesitates to confiscate frozen Russian assets due to concerns over sovereign immunity and potential economic repercussions, such as the loss of other foreign investments, including $3 trillion in Chinese reserves. Although the UN General Assembly has a resolution allowing for reparations from Russian reserves, its implementation remains stalled.
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