US, Europe agree to lock up Russian assets until it pays for Ukraine war, clearing way for USD 50 billion loan

The United States and European countries have agreed to lock up sanctioned Russian assets until Moscow pays reparations for its invasion of Ukraine, a senior US official said on Thursday. The move clears the way for leaders to announce a USD 50 billion loan package for Kyiv at the Group of Seven summit, where President Joe Biden is set to sign a security agreement with Ukraine's Volodymyr Zelenskyy.

The highly anticipated agreement will leverage interest and income from the more than USD 260 billion in frozen Russian assets, largely held in Europe, to secure a USD 50 billion loan from the US and additional loans from other partners.

The first disbursements will be made this year, but it will take time for Ukraine to use all the money, the official said. The official spoke on the condition of anonymity to preview the agreement, which will be included in the G7 leaders' communique on Friday.


The leaders' statement will also leave the door open to confiscating the Russian assets entirely, for which the allies have yet to secure the political will, largely citing legal and financial stability concerns.

Biden will meet on Thursday with Zelenskyy to discuss a bilateral security agreement between the US and Ukraine, as the international group of wealthy democracies has been looking for new ways to bolster Ukraine's defences against Russia.

It comes several months after the White House broke through a logjam in Congress that stalled approval of some USD 60 billion in US aid for Ukraine. The delay gave Russia time to make up ground on the battlefield.

Biden's national security adviser, Jake Sullivan, described the pact as a "real marker" of the US commitment to Ukraine, "not just for this month and this year, but for the many years ahead".

Zelenskyy, on social media, said the document is "unprecedented, as it should be for leaders who support Ukraine".

Sullivan said the agreement would not commit US troops directly to Ukraine's defense against Russia's invasion. That is a red line drawn by Biden, who does not want to have the US pulled into a direct conflict with nuclear-armed Moscow.

Scores of countries and organisations are set to meet over the weekend in Switzerland to discuss peace for Ukraine. Biden is not scheduled to attend the summit, a decision that has disappointed Zelenskyy. Vice President Kamala Harris will represent the US instead.

Zelenskyy recently said the summit needs Biden's participation because other leaders value the US viewpoint. He said Biden's absence "will be only an applaud to Putin, a personal applaud to Putin".