The debate over whether Ukraine can lawfully receive an additional €30bn loan from €270bn in seized Russian state assets is expected to be a focal point at an upcoming meeting of G7 finance ministers in Stresa, Italy.
The US has been actively advocating for the plan, seeking support to allocate the funds for Ukraine’s reconstruction or to procure much-needed arms. However, disagreements persist within the G7, particularly between the US and Germany.
While some advocate for complete asset seizure, others, including Christine Lagarde, the European Central Bank president, have raised legal and economic concerns about such actions. Lagarde argues that seizing the assets could destabilize the financial system and undermine international legal norms.
€30 Billion Ukraine Loan from Russian Assets on G7 Agenda
In response, the US proposes using the frozen assets as collateral to provide Ukraine with a substantial loan, with interest paid from the profits generated by the assets. This approach aims to address objections while providing outstanding financial support to Ukraine.
Critics argue that using the assets as collateral effectively amounts to confiscation, while proponents emphasize the reversible nature of the measure until Russia pays reparations. Belgium, holding the largest share of frozen Russian assets within the G7, has already allocated a portion of the profits to support Ukraine.
Campaigners assert that legal scholarship supports the view that the assets can be seized under the doctrine of state countermeasures. They warn of dire consequences if Ukraine does not receive the assets, emphasizing the importance of supporting the country in its conflict with Russia.
