G7 Agrees On Loan Deal To Support Ukraine With Russian Assets

Leaders of the Group of Seven major democracies agreed on an outline deal on Thursday to provide $50 billion of loans for Ukraine using interest from Russian sovereign assets frozen after Moscow invaded its neighbour in 2022.

The political agreement was the centrepiece of the opening day in southern Italy of the annual summit of G7 leaders, attended for a second successive year by Ukrainian President Volodymyr Zelenskiy.

He signed a new, long-term security accord with US President Joe Biden after signing a 10-year security accord with Japan, with Tokyo promising to provide Kyiv with $4.5 billion this year -- underlining continued strong backing from the West.

Calling the frozen asset agreement a "significant outcome", Biden told reporters it was "another reminder to (Russian President Vladimir) Putin that we're not backing down."

The G7 plan for Ukraine is based on a multi-year loan using profits from some $300 billion of impounded Russian funds, the bulk of which are blocked in the European Union.

The technical details will be finalised in the coming weeks, with the new cash expected to reach Kyiv by the end of this year thanks to contributions from all G7 states -- the United States, Canada, Britain, France, Germany, Japan and Italy.

"This is a very clear commitment that should embolden the Ukrainians to do what they need to to defend their independence and sovereignty," said German Chancellor Olaf Scholz.

The aim of the deal is to ensure it can run for years regardless of who is in power in each G7 state - a nod to concerns that U.S. Republican presidential candidate Donald Trump may be much less sympathetic to Kyiv if he beats Biden in November's election, according to a person close to the talks.

Russia regards attempts by the West to take income from its frozen assets as criminal, foreign ministry spokeswoman Maria Zakharova said on Thursday, adding that Moscow's response would be very painful for the European Union.