US and Europe agree to block Russian assets until they pay for the war in Ukraine, paving the way for a $50 billion loan

BORGO EGNAZIA, Italy (AP) — The United States and European countries agreed to block sanctioned Russian assets until Moscow pays reparations for its invasion of Ukraine, a senior US official said on Thursday. The move paves the way for leaders to announce a $50 billion loan package for Kiev at the Group of Seven summit, where President Joe Biden is expected to sign a security deal with Ukraine. Volodymyr Zelenskyy.

The highly anticipated deal will leverage interest and proceeds from more than $260 billion in frozen Russian assets, largely held in Europe, to secure a $50 billion loan from the US and additional loans from other partners. The first disbursements will be made this year, but it will take some time for Ukraine to use all the money, the official said. The official spoke on condition of anonymity to preview the agreement, which will be included in the G7 leaders’ statement on Friday.

The leaders’ statement will also leave the door open to outright confiscation of Russian assets, for which allies have not yet secured political will, largely citing legal and financial stability concerns.

Biden will meet on Thursday with Zelenskyy to discuss a bilateral security deal between the US and Ukraine, as the international group of wealthy democracies looks for new ways to bolster Ukraine’s defenses against Russia.

The decision comes several months after the White House overcame an impasse in Congress that prevented the approval of around $60 billion in US aid to Ukraine. The delay gave Russia time to regain ground on the battlefield.

Biden’s national security adviser, Jake Sullivan, described the pact as a “true marker” of the US commitment to Ukraine, “not just for this month and this year, but for the many years to come.”

Zelenskyy, on social media, said the document was “unprecedented, as it should be for leaders who support Ukraine.”

Sullivan said the deal would not commit U.S. troops directly to defending Ukraine against Russian invasion. This is a red line drawn by Biden, who does not want the US to be drawn into a direct conflict with Moscow, which has nuclear weapons.

Dozens of countries and organizations are expected to meet over the weekend in Switzerland to discuss peace for Ukraine. Biden is not scheduled to attend the summit, a decision that disappointed Zelenskyy. Instead, Vice President Kamala Harris will represent the US.

Zelenskyy recently said the summit needs Biden’s participation because other leaders value the US point of view. He said Biden’s absence “will just be an applause for Putin, a personal applause for Putin.”