G7 nations have agreed upon a $50bn deal to fund Ukraine through profits on frozen Russian assets, Italian Prime Minister Giorgia Meloni has said.

“I confirm to you that we have reached political agreement to provide additional financial support to Ukraine of approximately $50bn by the end of the year,” Meloni, who is hosting the G7 this year, said on Thursday.

Meloni had invited President Volodymr Zelenskyy to join a special summit session on the Ukraine war with US President Joe Biden and the leaders of France, Germany, Canada, Japan and the United Kingdom.

Addressing the meeting at the luxury Borgo Egnazia resort, Zelenskyy thanked the leaders for their support, which he said would go towards “both defence and reconstruction”, though he emphasised the need for more weapons.

The G7 plan for Ukraine is based on a multiyear loan using profits from some $300bn of impounded Russian funds.

The issue is complicated, however, because if the Russian assets one day are unfrozen, then the windfall profits will no longer be able to be used to pay off the loan.

Each G7 country will contribute to the loan package, European Commission President Ursula von der Leyen said.

“All G7 are contributing to this loan. It is the windfall profits from the Russian immobilised assets in Europe that will serve it,” von der Leyen told reporters on the sidelines of the G7 summit in southern Italy.

“The finance ministers are now going through the details – for example, the topic of backstops that are necessary – and [will] clarify this as soon as possible.”

BDST: 1147 HRS, JUNE 14, 2024
MSK