Hungary to Delay G7 Loan to Ukraine Until After US Election, Reports Reuters

By Jan Strupczewski

LUXEMBOURG (Reuters) – Hungary has announced that it will delay a final decision on a $50 billion G7 loan to Ukraine until after the U.S. presidential election by postponing its stance on renewing EU sanctions against Russia, according to the country’s finance minister.

In order for the U.S. to contribute approximately $20 billion to the G7 loan, which would match the EU’s financial commitment, EU officials indicated that a revision of the sanctions renewal timeline is required, changing it from the current six months to every three years.

The remaining $10 billion of the loan will come from G7 members Canada, Britain, and Japan, who have already committed to participating.

This loan was initially agreed upon by G7 leaders in June and will be supported by funds generated from approximately $300 billion of Russian central bank assets that have been frozen in the West since Russia’s invasion of Ukraine in early 2022.

U.S. officials have expressed concerns about the uncertainty of whether the Russian assets backing the loan will remain frozen every six months.

"We believe that this issue regarding the extension of Russian sanctions should be decided after the U.S. elections. We need to understand the direction the new U.S. administration will take on this matter," stated Finance Minister Mihaly Varga during a news conference.

The European Union has indicated that funds from all frozen Russian assets in the West could finance a loan of up to 45 billion euros. Since most of these assets are held in Europe, the EU has stated it can contribute up to 35 billion euros to the G7 loan, which will be adjusted based on the U.S. contribution.

This matter will be further addressed at the G7 finance ministers meeting in Washington at the end of October. However, Hungary’s decision implies that the final contributions from each of the G7 countries will not be determined until after the election on November 5.