A crucial step. Germany agrees to use frozen Russian assets in favor of Ukraine - Bloomberg

The German government has decided to support the US plan to use the proceeds of frozen Russian assets to finance Ukraine, in particular, to provide a $50 billion loan. This could be a crucial step that will bring Washington and its allies closer to providing a new substantial aid package to the country that is under full-scale attack.

This was reported by Bloomberg. It is noted that the G7 (Group of Seven) is expected to discuss the issue this week. However, the decision will not be made until mid-June.

"German officials are ready to support the U.S. plan to use future proceeds from frozen Russian assets to help Ukraine. ... What is at stake is whether the Ukrainian government will be able to remain financially viable until 2025," the statement said.

It is emphasized that in this way, Ukraine's partners seek to ensure its medium-term financing. And also "to send a signal to Moscow that support for Kyiv among the G7 allies is not weakening."

What preceded it

For several months, the United States has been trying to use frozen Russian assets to help Ukraine. The proposals varied:

• from complete confiscation and transfer of the money to Ukraine
• to storing it for bonds or using it to secure some form of loan

However, they were met with skepticism in a number of countries. In particular, Germany and France, which expressed concerns about:

• their legality
• the impact of such steps on the financial stability and attractiveness of the euro

As reported earlier, U.S. Special Representative for Ukraine's Economic Recovery Penny Pritzker explained that the process of confiscating Russian assets would require a collective decision by all countries that have frozen Russian funds in their financial institutions. It will take time, so we should not expect it to happen quickly.

At the same time, President of Ukraine Volodymyr Zelenskyy has set the government the task of ensuring that Russian assets frozen in the West are transferred to Ukraine. That is why a separate subgroup is being set up to work on the issue.

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