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G7 leaders agree on $50 bln loan package for Ukraine, using interest from frozen Russian assets

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Leaders of the Group of Seven (G7) major democracies reached an outline agreement on Thursday to provide $50 billion in loans for Ukraine, utilizing interest from Russian sovereign assets frozen after Moscow’s invasion in 2022.

This political agreement was the highlight of the G7 annual summit in southern Italy, attended for the second consecutive year by Ukrainian President Volodymyr Zelenskiy.

On the sidelines of the summit, Zelenskiy signed a 10-year security accord with Japan, which includes a commitment of $4.5 billion in aid for Ukraine this year. He is also set to sign a new, long-term security agreement with U.S. President Joe Biden.

The G7 plan involves multi-year loans financed by profits from approximately $300 billion in frozen Russian funds. Technical details are to be finalized in the coming weeks, with additional funding expected by the end of the year.

The United States has pledged up to $50 billion, although this amount may decrease as other countries announce their contributions.

This deal aims to ensure long-term support for Ukraine, regardless of changes in leadership within the G7 states, particularly in light of concerns that U.S. Republican presidential candidate Donald Trump might be less supportive of Kyiv if he wins the upcoming election.

Russia has condemned the West’s attempts to use income from its frozen assets, with foreign ministry spokeswoman Maria Zakharova warning of a “very painful” response for the European Union.

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G7 Leaders Face Domestic Challenges but Aim to Influence Global Affairs

Many G7 leaders are grappling with domestic challenges but remain determined to make a global impact, particularly in countering China’s economic ambitions. Italian Prime Minister Giorgia Meloni, hosting the summit in Puglia, expressed optimism about achieving “concrete and measurable results” over the two days of discussions.

While Meloni enjoys high domestic support following a recent European parliament election victory, other G7 leaders face significant internal issues.

These include U.S. President Biden, Japanese Prime Minister Fumio Kishida, French President Emmanuel Macron, German Chancellor Olaf Scholz, British Prime Minister Rishi Sunak, and Canadian Prime Minister Justin Trudeau.

Global Concerns and Future Outlook

The G7 leaders also addressed the situation on the Israel-Lebanon border, endorsed U.S. efforts to secure a Gaza ceasefire, and urged Israel to avoid a full-scale offensive in Rafah, in line with international law.

Additionally, they voiced unanimous concern over China’s industrial overcapacity and committed to supporting African economic development.

The summit’s sessions, held at the Borgo Egnazia resort in Puglia, will later include a broad range of leaders, including Pope Francis, who is expected to deliver a keynote speech on artificial intelligence.

Other invitees include leaders from India, Brazil, Argentina, Turkey, Algeria, and Kenya, highlighting the G7’s inclusive approach this year.

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