LARRY PADRON’s Post

To continue the topic of seizure and recovery of sovereign russian assets in favour of Ukraine. A new idea is circulating in the government offices of Europe and the G7 countries in particular: “raise debt to fund the war-torn country under” the guarantee of seized russian assets. But the devil is in the details. On the one hand, our partners, in particular the European ones, argue that they cannot directly recover and transfer the assets to Ukraine due to the lack of a legal mechanism and economic (read political) risks. Then I have a question: how are they going to guarantee the debt with these same assets? And what if they have to repay it at their expense? Then we will return to the same question of the mechanism and legitimacy of their collection. In my opinion, this is just delaying of the decision, because only the adoption of such a mechanism in principle allows this money to be used as a tool for both guarantees and direct compensation for Ukraine's losses in connection with russia’s armed aggression.

The US agrees to provide almost $20B as part of the G7's loan to Ukraine. According to FT, Western officials want to deliver funding to Kyiv by the end of the year, realizing that if Donald Trump wins the US elections in November, Washington's aid to Ukraine is at risk. Recently the US' contribution had been expected to be less than initially planned because the EU's failure to guarantee that Russian assets would remain frozen for at least three years. However, on October 18 US officials told their G7 counterparts that Washington will provide nearly $20B. They said this is possible even if the EU fails to convince Hungarian Prime Minister Viktor Orbán to lift his veto on extending EU sanctions. This is a condition that Washington has been insisting on. The G7 finance ministers, who will meet in Washington on October 25 on the sidelines of the IMF and World Bank meetings, should state the loan's distribution and structure. The US is still consulting with members of Congress and Ukrainian officials on the loan's repayment. https://lnkd.in/dwhNzhdJ

The EU is not in a rush to provide Ukraine with the $50B loan secured by Russian assets, though Kyiv desperately needs it. The EU has still not taken the necessary steps to fulfill the agreement with the G7 and provide Ukraine with about $50B, secured by revenues from the Russian Federation’s assets, by the end of the year. The EU was supposed to pass legislation that would extend the freeze on sovereign Russian assets until Moscow has paid for its war against Ukraine. This would ensure that the frozen assets would remain available to generate the interest that would be used to repay the loan to Ukraine. The decision is very important for Ukraine, as $50B roughly covers its annual budget deficit. However, the implementation of this decision in the EU has reached a dead end. None of the big players in the bloc, such as Germany, France or even the EC, have taken the initiative to advance the issue, which restrains the US. The reasons for the delay on the part of the EU are bureaucratic inertia after the European Parliament elections, summer vacations, and negotiations on the formation of a new EC. https://lnkd.in/dhYecwr3

As $50B 🇺🇦 loan is on the table in G7 summit, there are three key takeaways: 1️⃣ Without the load Ukraine will struggle to pay for its war effort. 2️⃣ The US strongly lobbies EU allies to secure money influx for Kyiv. 3️⃣ Trump’s potential reelection could put Western support to Ukraine on a brink. https://lnkd.in/dfQnhKkH

#VantageOnFirstpost Will US & G7 Leaders Make Russia Fund Ukraine's $50 Billion Loan? | Vantage with Palki Sharma The G7 summit starts tomorrow. Western Leaders are expected to hold discussions on using frozen Russian assets to provide financial assistance to Ukraine. The US has proposed a plan to extend a $50 billion loan to Ukraine. The loan could possibly be repaid by the interest generated from $280 billions of frozen Russian sovereign assets held in the West. This move has sparked controversy. While the West sees it as a way to support Ukraine and pressure Russia, there are concerns about its legality and potential consequences. Russia has threatened to retaliate against the West, if they go ahead with this plan. The EU believes they can defend themselves in court, but there is a risk of a prolonged legal battle. Moscow has responded by signing a decree allowing them to seize Western assets held in Russia, potentially worth $290 billion. This tit-for-tat action could escalate tensions further. Palki Sharma tells you more. --- Russia | Ukraine | War | USA | Russian Assets | Ukraine Loan | G7 Summit | Italy | Russia | Ukraine | Firstpost | World News | News Live | Vantage | Palki Sharma | News #russiaukrainewar #g7summit #usa #russia #assets #ukraine #loan #italy #vantageatg7 #firstpost #vantageonfirstpost #palkisharma #worldnews

The US continues to push on other G7 countries with their plan to use interest profits from Russia's sovereing assets for Ukraine's needs through providing a USD 30 billion loan. Their plan, however, seems not address the EU concerns about, among others, who would honor the debt should the war ends and Russia's sovereing assets to be a part of the peace settlement. https://lnkd.in/d4WBA9YS

European defence spending would be more efficient if the EU established a permanent capacity to raise its own debt and provide common funding to support investment in the bloc. Fabio Panetta, #Central_Bank_of_Italy Governor, said there was a “strong economic case” for Brussels to provide centralised funding for EU #defence, which “lags behind that of other global players” in its efficiency, and other key areas such as #green_energy and #digitisation. A solid argument for the idea that the European Union has in the common defence project an opportunity to accelerate fiscal unity, to support a common #debt to finance something really useful and strongly appreciated by all citizens: how can one disagree?

EU hopes to transfer 1 bln euro of incomes from frozen Russian assets to Kiev by July 1 According to European Commission President Ursula von der Leyen, EU leaders have expressed their support for the European Commission’s proposals during the summit March 22/ By July 1, the European Union will be able to donate to the Kiev government one billion euro generated by incomes from frozen Russian assets if it manages to promptly agree on the procedure of their seizure, European Commission President Ursula von der Leyen said. "If we are swift enough in concluding the proposal, we could disperse the first billion on the 1st of July," she told reporters after the first day of the European Council meeting in Brussels. In her words, EU leaders have expressed their support for the European Commission’s proposals during the summit. In 2024, the European Commission plans to generate about 3 billion euro in 2024 if the expropriation mechanism is approved, von der Leyen added. The European Council said in a joint statement that the heads of EU states and governments failed to make any practical decision regarding the expropriation of frozen Russian sovereign assets. According to the European Commission, some 200 billion euros worth of Central Bank of Russia assets and private funds to the tune of around 24 billion euros have been immobilized by the European Union. EU High Representative for Foreign Affairs and Security Policy Josep Borrell proposed that EU countries send 90% of the proceeds from Russia’s frozen assets to the European Peace Fund to finance arms supplies to Kiev, and transfer the remaining 10% to the EU budget to then be used to support Ukraine’s military industry. #business #finance #financialservices

G-7 FINANCIAL SUPPORT TO UKRAINE, A GOOD CASE STUDY FOR INTERNATIONAL POLITICAL ECONOMISTS. The Group of Seven (G7) nations have implemented an innovative approach to financially support Ukraine amidst its ongoing conflict with Russia. This strategy involves utilizing Russian assets that have been confiscated by G7 countries to provide loans to Ukraine. Sanctions on Russia, targeting assets held by the Russian state and oligarchs led to the confiscation of a significant amount of Russian property and financial assets located within G7 jurisdictions. Keeping such pooled resource, G7 countries extended loans to Ukraine to support rebuilding its economy, infrastructure, and ongoing defense efforts. The unique aspect of this financial arrangement is not expecting Ukraine to repay the loans from its national budget, but the repayment to come from the interest generated by the confiscated Russian assets. This strategy serves a dual purpose (i) it alleviates the financial burden on Ukraine while simultaneously ensuring that the confiscated Russian assets are utilized in a manner that counters Russian interests. (ii) Politically, it reinforces the G7's commitment to support Ukraine and penalize Russia, creating a financial repercussion for Russia's actions without directly taxing the citizens of Ukraine. This looks innovative. Let’s sees how sustainable and politically effective this would prove to be. Parth Shah Prashant NARANG Divya Dwivedi #Ukraine #G7 #Russia #war

For months, European Union officials have been looking for ways to use assets worth around €200 billion that the bloc immobilized after Vladimir Putin's invasion of Ukraine in February 2022. The G7 group of industrialized nations are considering a proposal to use these assets as collateral for bank loans that can finance Ukraine’s reconstruction. These proposals come amid mounting concerns about Moscow's retaliation ― including potential cyberattacks targeting Western countries ― against a full-scale confiscation of its frozen assets. https://lnkd.in/eUZqNG2X