Russia warns of retaliation after G7 agrees to raise $50bn for Ukraine

By David Averre

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The Kremlin has vowed an 'extremely painful' retaliation after the Group of Seven (G7) countries finalized a 'cynical and criminal' deal to raise some $50 billion for Ukraine - partially from seized Russian assets. Ukraine has been eager for fresh assistance to hold the line against Vladimir Putin's troops, who since the war entered its third year in February have made significant gains on the battlefield. But this week's G7 summit in Italy proved particularly fruitful for Ukrainian President Volodymyr Zelensky, with the group's leaders agreeing to pull together a 'historic' loan worth $50 billion that is backed by the interest earned on Russian assets frozen in the EU and U.S..

The Kremlin has vowed an 'extremely painful' retaliation after the Group of Seven (G7) countries finalized a 'cynical and criminal' deal to raise some $50 billion for Ukraine - partially from seized Russian assets. Ukraine has been eager for fresh assistance to hold the line against Vladimir Putin's troops, who since the war entered its third year in February have made significant gains on the battlefield. But this week's G7 summit in Italy proved particularly fruitful for Ukrainian President Volodymyr Zelensky, with the group's leaders agreeing to pull together a 'historic' loan worth $50 billion that is backed by the interest earned on Russian assets frozen in the EU and U.S..

Zelensky and U.S. President Joe Biden also sent what they described as a message of unified opposition to the Russian President, inking a key security agreement that will see Washington provide ten years of military and financial support for Kyiv. 'He cannot wait us out, he cannot divide us,' Biden declared, while Zelensky said the agreement demonstrated the 'credibility of American support for our Ukrainian independence.'

Zelensky and U.S. President Joe Biden also sent what they described as a message of unified opposition to the Russian President, inking a key security agreement that will see Washington provide ten years of military and financial support for Kyiv. 'He cannot wait us out, he cannot divide us,' Biden declared, while Zelensky said the agreement demonstrated the 'credibility of American support for our Ukrainian independence.' 

The details of the plan to fund Ukraine are yet to be revealed, with an official statement from the G7 expected later today. But diplomats confirmed that the leaders of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States had all reached an agreement to offer a loan to Kyiv. The highly anticipated agreement will leverage interest and income from the more than $260 billion in frozen Russian assets, largely held in Europe, to secure a $50 billion loan from the U.S., along with additional loans from other partners.

The details of the plan to fund Ukraine are yet to be revealed, with an official statement from the G7 expected later today. But diplomats confirmed that the leaders of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States had all reached an agreement to offer a loan to Kyiv. The highly anticipated agreement will leverage interest and income from the more than $260 billion in frozen Russian assets, largely held in Europe, to secure a $50 billion loan from the U.S., along with additional loans from other partners.

The first disbursements will be made this year, a U.S. official speaking on condition of anonymity said yesterday, adding that it will take time for Ukraine to use all the money. European officials have resisted confiscating the assets entirely and simply handing them over to Ukraine, citing legal and financial stability concerns. But officials say those assets are generating roughly $3 billion in interest every year, which can be used to secure the loan.

The first disbursements will be made this year, a U.S. official speaking on condition of anonymity said yesterday, adding that it will take time for Ukraine to use all the money. European officials have resisted confiscating the assets entirely and simply handing them over to Ukraine, citing legal and financial stability concerns. But officials say those assets are generating roughly $3 billion in interest every year, which can be used to secure the loan.

Russia's foreign ministry spokeswoman Maria Zakharova was enraged by the news, describing the plan as 'criminal and cynical' in comments to the Russian press yesterday. She also vowed the Kremlin would take 'extremely painful' retaliation, considering a whole arsenal of retaliatory political and economic measures, according to the TASS news service. The Ukraine-U.S. security pact meanwhile does not offer Ukraine any new money but includes a commitment by the White House to work with Congress on a source of sustainable funding for the future.

Russia's foreign ministry spokeswoman Maria Zakharova was enraged by the news, describing the plan as 'criminal and cynical' in comments to the Russian press yesterday. She also vowed the Kremlin would take 'extremely painful' retaliation, considering a whole arsenal of retaliatory political and economic measures, according to the TASS news service. The Ukraine-U.S. security pact meanwhile does not offer Ukraine any new money but includes a commitment by the White House to work with Congress on a source of sustainable funding for the future.

Text of the agreement released by the White House also describes how Washington will collaborate with its Western allies and other partners to make sure Ukraine has the military, intelligence and other means necessary to defend itself and deter Russian aggression. But either side can terminate the agreement in writing with six months' notice, which means a future U.S. president - including Donald Trump if elected in November - could cancel the arrangement.

Text of the agreement released by the White House also describes how Washington will collaborate with its Western allies and other partners to make sure Ukraine has the military, intelligence and other means necessary to defend itself and deter Russian aggression. But either side can terminate the agreement in writing with six months' notice, which means a future U.S. president - including Donald Trump if elected in November - could cancel the arrangement.

Trump has been sceptical of providing additional military aid to Ukraine, at one point criticising the 'endless flow of American treasure' to Kyiv. More recently, though, he has expressed openness to lending money instead and has said Ukraine's independence is important to the United States. Besides the security deal with the U.S., the leaders of Ukraine and Japan also sealed a 10-year agreement under which Japan will provide defence and humanitarian aid, reconstruction and technical and financial support.

Trump has been sceptical of providing additional military aid to Ukraine, at one point criticising the 'endless flow of American treasure' to Kyiv. More recently, though, he has expressed openness to lending money instead and has said Ukraine's independence is important to the United States. Besides the security deal with the U.S., the leaders of Ukraine and Japan also sealed a 10-year agreement under which Japan will provide defence and humanitarian aid, reconstruction and technical and financial support.

Zelensky and Japanese Prime Minister Kishida Fumio signed the accord on the sidelines of the G7 summit yesterday, with the Ukrainian President later commenting that Tokyo would provide $4.5 billion for Ukraine this year. Japan will support Ukraine with the provision of non-lethal equipment and goods, cooperate in the field of intelligence and provide support in reconstruction and recovery, as well as providing assistance in the medical and health fields, among others. 'For Japan, this type of agreement and this level of support is a breakthrough,' Zelensky wrote on the social media platform X. 'We see this and thank Japan for its unwavering solidarity with our country and people.'

Zelensky and Japanese Prime Minister Kishida Fumio signed the accord on the sidelines of the G7 summit yesterday, with the Ukrainian President later commenting that Tokyo would provide $4.5 billion for Ukraine this year. Japan will support Ukraine with the provision of non-lethal equipment and goods, cooperate in the field of intelligence and provide support in reconstruction and recovery, as well as providing assistance in the medical and health fields, among others. 'For Japan, this type of agreement and this level of support is a breakthrough,' Zelensky wrote on the social media platform X. 'We see this and thank Japan for its unwavering solidarity with our country and people.'

A text of the deal released by the Japanese Embassy in Italy said Japan has committed and provided more than $12 billion in financial, humanitarian and other assistance since March 2022. The momentous funding deal and security agreements agreed in Italy this week came just days after several Western partners announced a new battery of sanctions to crack down further on Russia's ability to wage war in Ukraine. Britain said the new sanctions package would target entities based in China, Israel, Kyrgyzstan and Turkey, as well as the Russian energy industry.

A text of the deal released by the Japanese Embassy in Italy said Japan has committed and provided more than $12 billion in financial, humanitarian and other assistance since March 2022. The momentous funding deal and security agreements agreed in Italy this week came just days after several Western partners announced a new battery of sanctions to crack down further on Russia's ability to wage war in Ukraine. Britain said the new sanctions package would target entities based in China, Israel, Kyrgyzstan and Turkey, as well as the Russian energy industry.

The sanctions announced at the start of Thursday's G7 summit apply to 50 companies and individuals involved in supplying munitions, machine tools, microelectronics, and logistics to the Russian military, together with ships transporting military goods from North Korea to Russia. Britain also said it was targeting the 'shadow fleet' of ships used to circumvent G7 sanctions on the Russian oil and natural gas industry. The UK Foreign Office said this is particularly important because taxes on oil production accounted for 31% of the Russian government's revenue last year. British Prime Minister Rishi Sunak said in a statement that the UK 'will always stand shoulder to shoulder with Ukraine in its fight for freedom'.

The sanctions announced at the start of Thursday's G7 summit apply to 50 companies and individuals involved in supplying munitions, machine tools, microelectronics, and logistics to the Russian military, together with ships transporting military goods from North Korea to Russia. Britain also said it was targeting the 'shadow fleet' of ships used to circumvent G7 sanctions on the Russian oil and natural gas industry. The UK Foreign Office said this is particularly important because taxes on oil production accounted for 31% of the Russian government's revenue last year. British Prime Minister Rishi Sunak said in a statement that the UK 'will always stand shoulder to shoulder with Ukraine in its fight for freedom'.

Sunak added that Russian President Vladimir Putin 'must lose, and cutting off his ability to fund a prolonged conflict is absolutely vital.' Zelensky will leave Italy and head for Switzerland following the conclusion of the G7 meeting today in anticipation of this weekend's much heralded Ukraine peace summit. Around 90 states and organizations have confirmed their participation in the two-day conference which aims to create a pathway to peace in Ukraine. Zelensky will use the talks to build support for Ukraine's position on three key themes surrounding Russia's February 2022 invasion: food security, nuclear safety and the release of all prisoners and deportees.

Sunak added that Russian President Vladimir Putin 'must lose, and cutting off his ability to fund a prolonged conflict is absolutely vital.' Zelensky will leave Italy and head for Switzerland following the conclusion of the G7 meeting today in anticipation of this weekend's much heralded Ukraine peace summit. Around 90 states and organizations have confirmed their participation in the two-day conference which aims to create a pathway to peace in Ukraine. Zelensky will use the talks to build support for Ukraine's position on three key themes surrounding Russia's February 2022 invasion: food security, nuclear safety and the release of all prisoners and deportees.

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