Hungary plans to delay a final agreement on a $50 billion G7 loan for Ukraine until after the US presidential election. This was announced by Hungarian Finance Minister Mihaly Varga.
The postponement is linked to Hungary’s decision to wait for the moment to renew EU sanctions against Russia. The US has asked the EU to extend the sanctions renewal period from six-monthly to three-yearly. In return, the US would contribute $20 billion to the loan, matching the EU’s commitment.
The loan, which the G7 leaders agreed in principle in June, is to be financed by the proceeds from around $300 billion in Russian central bank balances. These assets were frozen in the West following Russia’s invasion of Ukraine in early 2022. The US prefers a longer sanctions renewal period to ensure the stability of the assets securing the loan.
Canada, Britain and Japan, also members of the G7, have pledged to contribute the remaining $10 billion of the loan. The European Union signaled that proceeds from all Russian assets frozen in the West could finance a loan of up to 45 billion euros (about $49.44 billion). Since the majority of these assets are in Europe, the EU said it could provide up to 35 billion euros for the G7 loan. This amount would be adjusted depending on the size of the U.S. contribution.
During a press conference, Finance Minister Varga emphasized that the decision to extend sanctions on Russia should only be made after the US elections. This is necessary to understand the direction of the future US administration on this matter.
Discussions on the issue are expected to continue at the meeting of G7 finance ministers in Washington later in October. However, Hungary’s position suggests that the final contributions of the individual G7 countries will only be determined after the election on November 5th, 2023.
Reuters contributed to this article.
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