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European Commission president Ursula von der Leyen travelled to Kyiv on Friday to announce a €35bn EU loan for Ukraine as part of a G7 plan to raise $50bn on the back of future profits from frozen Russian state assets, three people with knowledge of the plan told the Financial Times.
On her eighth visit to Ukraine, von der Leyen wrote on X upon arrival that she would meet leaders in Kyiv to discuss a range of issues from “winter preparedness to defence, to [EU] accession and progress on the G7 loans”.
The loan announcement comes at a time of additional and urgent need of aid for Ukraine due to Russia’s repeated attacks on its energy infrastructure, and after months of negotiations with G7 partners about their share and structure of the loan.
“These assets should be used to protect lives in Ukraine against Russian aggression,” President Volodymyr Zelenskyy said on Thursday evening.
“There is a clear decision regarding $50bn for Ukraine from Russian assets, and a mechanism for its implementation is needed to ensure that this support for Ukraine is felt in the near future,” he added.
G7 leaders agreed in June to make $50bn available in loans to Ukraine and divide that according to their relative economic weight, which would have resulted in the EU and US covering $20bn each, with Canada, Japan and the UK making up the rest.
But the US conditioned its participation on legal reassurances that the assets would stay frozen for longer. The EU, where nearly €200bn of Russian state assets are immobilised, has been unable to guarantee that, due to Hungary’s opposition to extending the sanctions regime against Russia.
To make up for American no-show and bypass Budapest’s veto, the commission sought to increase its share of the loan to up to €40bn, guaranteed against the bloc’s common budget. But EU capitals baulked at the figure, pressuring Brussels to get the UK, Canada and Japan to increase their share.
The final amount of €35bn comes as a compromise allowing the US to come in at a later date and thus decrease EU exposure.
A majority of EU countries and the European parliament need to approve the EU loan before year’s end.
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