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Wednesday, July 17, 2024  
10 Muharram 1446  

G7 eyes Ukraine funding plan at Italy summit

G7 leaders are hoping to agree on a $50 billion loan for Kyiv
Flags are pictured during the first working session of G-7 foreign ministers in Muenster. Reuters
Flags are pictured during the first working session of G-7 foreign ministers in Muenster. Reuters

G7 leaders gather Thursday for the first day of an Italy summit, seeking to seal a deal on using frozen Russian assets to help war-torn Ukraine.

Ukrainian President Volodymyr Zelensky will join US President Joe Biden and leaders from Italy, Britain, France, Germany, Canada and Japan at the luxury Borgo Egnazia resort in Puglia.

The G7 leaders are hoping to agree on a $50 billion loan for Kyiv, secured against the future profits from interest on 300 billion euros ($325 billion) of Russian central bank assets frozen after the February 2022 invasion.

The European Union – where most of the funds are being held – agreed earlier this year to use the profits for Ukraine, worth up to three billion euros a year.

But the idea at the G7 is to use this to provide more, faster help in the form of a massive upfront loan – although key questions such as who issues the debt and who shares the risk are still being hammered out.

French President Emmanuel Macron’s office on Wednesday said a deal had been agreed on providing $50 billion for Ukraine before the end of the year, but said that technical details still needed to be finalised.

Britain, meanwhile, said it would announce up to $310 million in new bilateral assistance to Kyiv at the summit, adding leaders would “explore all lawful avenues by which immobilised Russian assets can be used to support Ukraine”.

The White House also said it expected to announce at the summit “new steps to unlock the value” of the Russian assets.

But US National Security Advisor Jake Sullivan was on Wednesday more guarded about what this may entail, saying only that the G7 was working towards announcing “a framework”, including a timeframe.

Zelensky is attending as part of a week of diplomatic efforts to rally support as his country’s outmanned and outgunned forces struggle against Russia.

It will culminate in an international conference on Ukraine in Switzerland this weekend.

Mideast, China

The summit comes at a time of extraordinary global turmoil.

As well as the conflict in Ukraine – now in its third year – the Hamas-Israel conflict is raging and economic tensions are rising between China and Western countries.

Many G7 countries are also in political flux. Everyone in Puglia is aware this could be Biden’s last G7 summit if he loses to Donald Trump in November US elections.

Britain’s Rishi Sunak is tipped to be ousted in July 4 elections, while France’s Macron and Germany’s Olaf Scholz are both under pressure after gains by the far right in EU elections last weekend.

The G7 summit opens Thursday morning with a short session on Africa, development and climate change, before turning to the Middle East.

The leaders have already announced their support for a Gaza truce deal outlined by Biden, which would also see the release of hostages taken in Hamas’s October 7 attack on Israel.

Jordan’s King Abdullah II – a strong supporter of the Palestinian cause whose country signed a peace treaty with Israel 30 years ago – is among around a dozen non-G7 guests also attending who are not, however, participating in the working sessions.

They include Turkish President Recep Tayyip Erdogan, UAE president Sheikh Mohamed bin Zayed and India’s Narendra Modi.

Brazilian President Luiz Inacio Lula da Silva – whose country holds the rotating G20 presidency this year – as well as Argentina’s Javier Milei and UN Secretary General Antonio Guterres also plan to attend.

All the guests are invited to a dinner Friday night at the Borgo Egnazia luxury hotel complex, built in the style of a traditional village.

With security extremely tight, the venue is far away from protesters and journalists, with the media centre located some 60 kilometres away in Bari.

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Another key issue in Puglia, to be discussed Friday, will be concerns about China’s so-called “industrial overcapacity”, particularly in green energy and technology sectors such as solar panels and electric vehicles.

The US, EU and Japan have all voiced concern that generous subsidies from Beijing are resulting in a flood of cheap goods hitting the global market, threatening Western firms.

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