G7 Seeks to Finalize $50 Billion Loan Deal for Ukraine by End of October, EU Reports

BRUSSELS (Reuters) – The Group of Seven (G7) nations aims to finalize a political agreement on a $50 billion loan for Ukraine by the end of October. This timeline would enable the funds to be available before the year’s end, according to a senior official from the European Commission.

The G7 members include the United States, Canada, Japan, the United Kingdom, France, Germany, and Italy. The European Union, represented through its institutions, is also part of this group.

Valdis Dombrovskis, European Commission Executive Vice President, stated in the European Parliament, "The G7 presidency is currently seeking political commitment regarding participation in this loans initiative around the end of October, which would provide G7 lenders enough time to operationalize the loans by the year’s end."

The proposed loan for Ukraine is intended to be funded through profits generated from Russian assets that have been frozen in Western countries. Over two-thirds of these assets, approximately 210 billion euros, are located within the EU.

As a result, the EU is expected to contribute significantly, providing up to 35 billion euros ($39 billion) of the total loan. Dombrovskis noted that Canada, the UK, and Japan have already made clear commitments to participate.

The United States remains hesitant, seeking assurances from Europe that the funds from the frozen assets will be used to repay the loan as needed. A complicating factor is that the EU’s decision to maintain the freeze on Russian assets must be renewed every six months, requiring unanimous approval from all 27 EU member states. This poses a legal risk, as a single country, such as Hungary—known for its pro-Russia stance—could potentially block the renewal.

To mitigate concerns expressed by Washington, the EU is planning to propose extending the renewal period from six to 36 months, subject to a unanimous vote in October. Dombrovskis indicated that while success is probable, it is not guaranteed.

"In the absence of such a change, the U.S. can still join the initiative, but with a significantly lower contribution," he added.

Dombrovskis emphasized the necessity for the EU’s portion of the loan to be legally established by the end of this year, as the EU plans to borrow against the security of its budget—an option that will only be available until the end of 2024.