At G7, Biden to push $50B loan to Ukraine using frozen Russian assets

(WASHINGTON) — President Joe Biden’s key priority at the G7 summit in Italy this week is to solidify an agreement that could provide some $50 billion to Ukraine using profits from frozen Russian assets, according to a source familiar with the matter.

The U.S. argues this is a solution to relieve Ukraine’s desperate battlefield situation using Russian funds instead of taxpayer dollars. Ukraine’s President Volodymyr Zelensky will attend the summit to personally drive home the urgency.

Biden is also expected to meet with Zelensky this week — their second meeting in a week after their sit down in Paris.

Yet, the seven member countries have not reached a consensus. They will be negotiating the details during the summit, aiming to announce the agreement in the G7 communique at the end of the summit this week, the source added.

This plan to finance Ukraine would send a powerful message to Russia’s Vladimir Putin that he will not outlast the U.S. and its allies’ support for Ukraine, regardless of how elections in their countries unfold, according to the source.

But the G7 nations have to hammer out tricky details, including how disbursement would work and what the repayment assurances would be, the source said. European countries also have differing views on utilizing these profits, with some preferring direct spending on weapons. There are also complicated legal issues and concerns about who would back the loan.

Israel/Hamas war

This is the first G7 summit since the Hamas Oct. 7 attack on Israel. While there have been divisions among member countries over the war, the countries have now unified around President Biden’s plan for a cease-fire. Earlier this month, G7 leaders released a joint statement formally endorsing Biden’s plan and calling on Hamas to accept it.

China

Another key area of discussion among leaders is countering China’s trade practices and overcapacity. According to the source, the G7 nations agree that China’s excess industrial capacity poses a global problem.

The fear is that a flood of heavily subsidized products from China — including steel, machinery, solar products, electric vehicles, and batters — would decimate those industries in the U.S. and other countries. Last month, President Biden significantly increased tariffs on Chinese imports in strategic sectors, while leaving in place tariffs on more than $300 billion worth of Chinese goods that Trump had imposed.

Pope Francis, AI

Pope Francis will attend the summit to speak about artificial intelligence, another top priority at the G7. Francis has called for an international treaty to ensure AI is developed and used ethically.