Italy PM says EU states won’t be directly involved in G7 Ukraine loan

European Union states won’t be directly involved for now in a $50 billion loan that Group of Seven nations plan to raise for Ukraine based on income from frozen Russian assets, Italian Prime Minister Giorgia Meloni said on Saturday.

The Group of Seven rich democracies agreed during their annual summit in southern Italy to provide loans which will be backed by interest accrued from the blocked Russian funds.

“The loan of about 50 billion has already been announced (and will) be provided by the United States, as well as Canada, the United Kingdom, and probably Japan, within the limits of its constitutional constraints,” Meloni told a news conference.

“Currently, European nations are not involved in this loan, also considering the fact that the assets are all mobilized in Europe,” she said, implying that the bloc’s contribution consisted in providing a guarantee mechanism to repay the loan.

EU officials told Reuters earlier this week that the 27-nation bloc – which includes G7 members France, Germany and Italy – might provide about half the sum, in apparent contradiction to what Meloni said.

Some 260 billion euros ($278 billion) in Russian assets such as central bank reserves have been frozen under sanctions imposed following Moscow’s invasion of Ukraine in February 2022.

Around 190 billion euros of the assets are held in Euroclear, a Belgium-based central securities depository, making the EU a key player in any plan to make use of the assets. The United States holds about $5 billion of such assets.

Meloni also said she was not worried about the perspective of Russian assets being unfrozen before the loan is repaid, as that could happen only as a result of a peace negotiation which would include commitments on how to rebuild Ukraine.

($1 = 0.9346 euros)