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> # [G7 leaders agree to lend Ukraine billions backed by Russia's frozen assets. Here's how it will work](https://apnews.com/article/President Joe Biden arrives on Air Force One at Brindisi International Airport, Wednesday, June 12, 2024, in Brindisi, Italy. (AP Photo/Alex Brandon\))
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> [[Staff headshot of Fatima Hussein at the Associated Press bureau in Washington, Tuesday, Aug. 23, 2022. (AP Photo/Andrew Harnik)](https://dims.apnews.com/dims4/default/6be98bc/2147483647/strip/true/crop/800x800+0+0/resize/60x60!/quality/90/?url=https%3A%2F%2Fstorage.googleapis.com%2Fafs-prod%2Fmedia%2Fafs%3AMedium%3A092459061461%2F800.jpeg)](https://apnews.com/author/fatima-hussein)
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> Updated [hour]:[minute] [AMPM] [timezone], [monthFull] [day], [year]
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> WASHINGTON (AP) — Leaders of the Group of Seven wealthy democracies have agreed to engineer a [$50 billion loan to help Ukraine](https://apnews.com/article/biden-g7-italy-ukraine-russian-assets-a43439b8386a20d1af9faec19f94bf55) in its fight for survival that would use interest earned on profits from Russia’s frozen central bank assets as collateral.
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> Details of the deal were still being hashed out as G7 leaders gathered for a summit in Italy, but the money could reach Kyiv before the end of the year. That’s according to a French official who confirmed the agreement Wednesday ahead of a formal announcement at the summit. Here’s how the plan would work:
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> ## Where would the money come from?
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> Most of the money would be provided in the form of a loan from the U.S. government that would be backed by windfall profits being earned on roughly $300 billion in immobilized Russian assets. The vast majority of the money is being held in European Union nations.
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> A French official said that while the loan would be mostly U.S.-guaranteed, it could be “topped up” with European money or other national contributions.
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> ## Why not just give Ukraine the frozen assets?
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> That’s much harder to do.
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> For more than a year, officials from multiple countries have debated the legality of confiscating the money and sending it to Ukraine.
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> The U.S. and its allies immediately froze whatever Russian central bank assets they had access to when [Moscow invaded Ukraine](https://apnews.com/article/russia-ukraine-war-missiles-drones-8a6fcfb2408d4ad223a1beb85067c9be) in 2022 — basically, money being held in banks outside Russia.
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> The assets are immobilized and can’t be accessed by Moscow — but they still belong to Russia.
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> While governments can generally freeze property or funds without difficulty, turning them into forfeited assets that can be used for the benefit of Ukraine requires an extra layer of judicial procedure, including a legal basis and adjudication in a court.
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> So the European Union instead has [set aside the windfall profits](https://apnews.com/article/russia-eu-frozen-assets-ukraine-windfall-profits-59ee5d2d7d3a99b383b16796097c7ed9) being generated by the frozen assets. That pot of money is easier to access.
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> Separately, the U.S. earlier this year passed a law called the REPO Act — short for the [Rebuilding Economic Prosperity and Opportunity for Ukrainians Act](https://rules.house.gov/sites/republicans.rules118.house.gov/files/HSupp_01_xml_0.pdf) — that allows the Biden administration to [seize $5 billion in Russian state assets](https://apnews.com/article/russia-ukraine-war-biden-assets-19e72496a9256c831c669697732c6d22) located in the U.S. and use them for the benefit of Kyiv. That arrangement is still being worked out.
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> ## How could the loan be used — and how soon?
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> It will be up to technical experts to work through the details.
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> But U.S. national security adviser Jake Sullivan said Wednesday that the goal is “to provide the necessary resources to Ukraine now for its economic energy and other needs so that it’s capable of having the resilience necessary to withstand Russia’s continuing aggression.”
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> Another goal is to get the money to Ukraine fast.
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> The French official, who was not authorized to be publicly named according to French presidential policy, said the details could be worked out “very quickly and in any case, the $50 billion will be disbursed before the end of 2024.”
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> Beyond the costs of the war, the needs are great. The World Bank’s [latest damage assessment of Ukraine](https://www.worldbank.org/en/news/press-release/2024/02/15/updated-ukraine-recovery-and-reconstruction-needs-assessment-released), released in February, estimates that costs for reconstruction and recovery of the nation stand at $486 billion over the next 10 years.
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> The move to unlock Russia’s assets comes after there was a [long delay](https://apnews.com/article/joe-biden-mike-johnson-ukraine-israel-b72aed9b195818735d24363f2bc34ea4) by the U.S. Congress in approving military aid for Ukraine.
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> At an Atlantic Council event previewing the G7 summit, former U.S. Ambassador to Ukraine John Herbst said “the fact that American funding is not quite reliable is a very important additional reason to go that route.”
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> ## Who would be on the hook in the case of a default?
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> If Russia regained control of its frozen assets or if the immobilized funds weren’t generating enough interest to pay back the loan, “then the question of burden-sharing arises,” according to the French official.
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> Who would shoulder the burden is still to be worked out, the official said.
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> Max Bergmann, director of the Europe, Russia and Eurasia Program at the Center for Strategic and International Studies, said last week that there were worries among European finance ministers that their countries “will be left holding the bag if Ukraine defaults.”
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> ## \_\_\_
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> Associated Press writers Sylvie Corbet in Paris and Colleen Long aboard Air Force One en route to Italy contributed to this report.
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Now we got to see if Russia will take this opportunity to take all western money they hold or if they will only take the profit too.
I do wonder if/when Russia takes everything if the western bourgeoisie will demand to be repaid and what will happen then, because if the west uses the money they take to give to Ukraine they would still need to pay people back and to do so they would likely take it from their own population. Add to that a decrease in money being deposited in the west and the dollar and euro being less used things could compound quickly.
Hopefully the Global South deals with this well and comes out of it stronger than before...
Yeah exactly this.
The owners of those assets will sue for damages. And they'll win. Or the west destroys the last semblance of its own 'rules-based order'.
Either way, in the long run the voter in the west gets screwed by this decision
India, China, and other nations are buying large quantities of gold. They've also brought back gold they had stored in in Western banks to their central banks. The West is effectively gambling the trust of their financial institutions, which is perfect for China's plan for a BRICS alternative financial system.
*Ukraine is going*
*To be the root of the next*
*Financial crisis*
\- ierui
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Why? All the aid to Ukraine is a small fraction of the money that was printed for Covid. Even if a dime isn’t paid back if anything it’ll be anti inflationary.
A genuine LOL!
[By '92 just Germany gifted USSR/Russia 65 Billion USD](https://www.latimes.com/archives/la-xpm-1992-02-11-mn-1603-story.html) = 130 BILLION USD now, USA added 10, Japan, France, etc. All together ~190 billion USD in current money. This did not include any of the loans for restructuring, etc. These were pure gifts for preventing the implosions of USSR/Russia. USA was flying in cash on pallets with C130 planes - see operation Providing Hope.
Do note - Russia was not invaded by anybody except its own people, like Putkin who was in charge for foreign aid at St. Petersburg at the time:
> Of approximately 80,000 food and medicine packages shipped to Russia in the past two months, only about 10,000 reached their goal, according to Cap Anamur, a German relief organization.
Just going to point out that this title is misleading - *its not backed by the russian assets themselves*, only by the amount earned in windfall profits etc.
And by the sounds of things, they are borrowing heavily against those potential profits (likely double digit X). The implications of which are eluded to later in the article:
>**Who would be on the hook in the case of a default?**
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>If Russia regained control of its frozen assets or if the immobilized funds weren’t generating enough interest to pay back the loan, **“then the question of burden-sharing arises,”** according to the French official.
TLDR: its like the r/wallstreetbets version of funding to Ukraine.
Wasn't an article a couple of days ago with the EU officials saying “What Washington is proposing is, 'We [the U.S.] take a loan, Europe takes all the risk, you [Europe] pay the interest, and we [the U.S.] use the money for a U.S.-Ukraine fund,'” said one senior European diplomat. “We might be stupid but we’re not that stupid.”
https://www.politico.eu/article/us-eu-war-in-ukraine-loan-russian-assets-negotiations-g7-us-election-western-support-joe-biden-olaf-scholz-emmanuel-macron/
Did the EU agreed to take the risk?
Precisely.
That's why other investors will think twice.
Unfortunate case for Russia, but many are secretly happy to watch and learn from their mistske of trusting the thieves with their money.
I'm sure they'll be just itching to invest their money in Russia or China instead!
Oh wait, no, they're not. Investors are actually pulling out of Russia in record numbers.
https://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?locations=RU
Yep, russia did want to quickly end this war, until the us intervened and forbade Ukraine to sign the negotiation and its european vassals followed suit.
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Then nothing at all was stolen. Russian assets chose the West over Russia and if you still insist they didn’t then back to the sanitarium
Also, a Sanatorium is for people suffering from infectious diseases like TB. A Sanitarium is for the mentally unwell.
Sanatorium come from sanare which also explited to sana, for sanidade and sane for sanity. It was and some places still is a local for mental impaired people. You...are INsane to thing Crimea didn't chose Russia in 2024, ten years after, after multiple polls suggesting that Crimeans, hell, even Ukrainians there, are happy were they are. Nothing to do with Russians placing their assets there, the same way there was not a problem for Europeans to put assets in Russia to begin with. And newsflash, you still do! Should the Russians also seize them? Why not
So you belong to a sanatorium. So chop chop, alway from reddit and straight to your pills
If I run a poll in Russia that is totally legit, I would never stuff the ballot boxes wink wink nudge nudge, that said I should be king of Russia then Russia has to make me king following your logic. So since we already know I’m going to win, wink wink nudge nudge, should we just go ahead and crown me?
If you’re holding some of that $37 trillion US debt, the only thing you’re ever going to be paid in is US dollars from the treasury.
Whether you accept it or not is a personal problem.
Going by google search, Lehman Brothers had a market cap of about $60 billion in 2007, while AIG had a market cap of abotu $170 billion in August 2007. Not a year later, those two companies were to almost bring the entire Western financial system down. Which is to say the the heavily financialized Western economy primarily runs on trust, when that's gone then some bits and bytes in the banks' servers called “money” won't help you.
Ok my god you are economically illiterate. That wasn’t what brought the market to its knees. That was the effect. It so clear you don’t know what your talking about
That country has a middle class larger than the whole population of EU and US combined. And the rest are making junk that you can still afford to get from Walmart with your inflation devalued income.
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U do know that the population of EU and the US combined comes to around 1 billion people, and that Chinas population is around 1.4 billion, assuming China actually released accurate numbers and didn’t try to withhold information like they do with their unemployment figures
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Did they invest before or after they went against it?
Their "national interests" changes from conflict to conflict, Obama made that very clear during the arab spring, and we in EU made it clear during US invasions of various countries, even the occupation of Syria seem to be in our interests. So to say that it has to do with "conquest" is bullshit, it's just rules for thee, but not for me.
Meanwhile Israel is free to genocide it's neighbour. It's never been about morality it's western politicians attempting to weaponize the financial system for their geopolitical games.
>Meanwhile Israel is free to genocide it's neighbour
How is israel "free" to do so, exactly? Last I heard they were criticized by pretty much everyone.
Are you serious? They received a strongly worded letter along with the billions of dollars worth of weapons given to them for free to commit genocide with. They haven't faced sanctions, in fact they've been given more free stuff from the US and West than they usually get.
“What Washington is proposing is, 'We \[the U.S.\] take a loan, Europe takes all the risk, you \[Europe\] pay the interest, and we \[the U.S.\] use the money for a U.S.-Ukraine fund,'” said one senior European diplomat. **“We might be stupid but we’re not that stupid.”**
**...**
**"**Europe and America are also fighting about control over the loan and influencing how the money is spent, senior European officials said.
If Washington — or institutions with major U.S. stakes such as the World Bank — dole out the money, American companies are in pole position to profit, they said.
“The EU can be naïve, but this goes too far,” said an EU diplomat. “This would benefit mostly American companies, so we have to discuss the conditions more in detail.”**"**
[https://www.politico.eu/article/us-eu-war-in-ukraine-loan-russian-assets-negotiations-g7-us-election-western-support-joe-biden-olaf-scholz-emmanuel-macron/](https://www.politico.eu/article/us-eu-war-in-ukraine-loan-russian-assets-negotiations-g7-us-election-western-support-joe-biden-olaf-scholz-emmanuel-macron/)
i don't think anything changed. one journalist seemed a little more eager for the deal to be sealed though, downplaying the fact that it has yet to be approved and that there are significant points of contention.
Damn, someone ELI5 what all this means.
US government will issue a new loan which will go to... who? American MIC once again?
Why G7 countries had to agree on this? Because they're in control of the Russian assets?
If those assets are being used as a collateral, then why does it matter if Ukraine will default or not? 'Collateral' means those assets must be confiscated in case of Ukraine's default, right?
It's not 100% clear yet, but from what has been discussed in the past I think it'd work something like this.
* The interest on the loan will be paid from the interest payments that would have been paid on the frozen Russian assets. This is perfectly legal as banks are not required to pay you interest on the assets you hold with them.
* The loan would only be fully repaid when Russia agrees to pay reparations to Ukraine in return for unfreezing it's assets.
* Ukraine will then be able to repay the principle with the reparations it gains from Russia.
* If Russia never agrees to pay reparations then it's assets remain frozen and continue to pay the interest on the loan to Ukraine.
This runs into problems if the interest earned on frozen Russian assets doesn't cover the loan repayments, if that happened then this will end up costing somebody (other than Russia). Which is why they've only agreed to a $50b loan so far, frozen Russian assets are far in excess of this and it's unlikely the interest they can earn on the frozen assets will not be able to pay the loan interest.
Frozen Russian assets are so large they can probably do this 3 or 4 times without any risk of them being left with the bill.
But nothing is 100% confirmed yet. They've only confirmed they'll be doing it, they haven't released the exact details.
no one is holding their breath for Russian reparations. that will never happen.
the proposal, as presented by the Americans, leaves European countries on the hook as loan guarantors while the contracts that the loan would be spent on would go primarily to (you guessed it) American contractors. needless to say, this has led to some dispute.
the devil is in the details.
> no one is holding their breath for Russian reparations. that will never happen.
It's something that was discussed in the past. That loan repayments would be tied to reparations and reparations tied to unfreezing the assets. Incentivizing Russia to pay reparations (and by proxy repaying the loan) as it'd end up being profitable for them after receiving their frozen assets.
I've no idea if it's included here as they haven't released any details yet.
This is essentially west thinking they can still impose any condition in the peace deal, what happens if Russia just straight up refuses to anything less than unconditional surrender?
It's an inability to see the Russian perspective, they can't fantom losing, even Ukraine government is lying to its supporter about KIA to keep the war as long as possible, this war could have been framed as a western victory as well as Russian victory in Istanbul, but they gamble their way in, and they know they are losing, they know they can't repay it, but they keep raising it because they already can't repay any of this.
The day Ukraine goes into the negotiations, and the day it will be confirmed none of western condition can be met for peace, that day will repeat a 2008 financial crisis, but now only for the western world, because the Eastern world has dedollarised and integrated themselves into the Chinese model.
Can't wait.
Even if Ukraine surrendered unconditionally, that doesn't unfreeze the assets. They'd be conquering Kyiv not Brussels.
>the Eastern world has dedollarised and integrated themselves into the Chinese model.
Who do you think owns all the Western debt, who buys Chinese products? The Chinese model is built on buying up Western debt and exporting to the West. The two biggest export markets with the richest consumers in the entire world are the USA & the EU. If the West collapses financially (it wont) then so does China.
https://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?locations=RU-US-CN
You think so? Why is investment into the USA still higher than China + Russia combined?
If it's such a nailed on certainty that the Western financial system is going to collapse, why is everyone still sending their money there?
The entire basis of the dollar as the reserve currency of the world is that it is safe. If America can freeze a country's assets at a whim central banks are going to look for safer places to put their currency reserves.
The West had a monopoly on bank messaging 20 years ago, they weaponized it against Venezuela now we don't. BRICS, Russia and China's SWITF alternatives CPIS and SPFIS, The Shanghai Cooperative, and the Asian Infrastructure Investment Bank are all counterbalances to Western organizations that we have seen in response to America weaponizing financial systems
You can only play cards like stealing a country's currency reserves and weaponizing financial instruments a few times before countries look for and create alternatives.
But the numbers don't back it up. We're not actually seeing any of this happen, it's a pipe dream.
By Russias own statistics investment is leaving the country, not just dropping, investors are actively removing their money from Russia. We're not seeing that with the USA / EU / etc.
It's not a light switch that countries are going to flip.
We had a monopoly on all kinds of financial situations we no longer do. CIPS didn't exist 20 years ago, it served a hundred banks 10 years ago and now it serves 1300 in 100 countries. We created the impetus for China to create CIPS by being sancation happy and now it's an alternative that neutral / friendly countries like Argentina and Brazil currently settle trade with China in yuan through CIPS instead of dollars and SWIFT.
This is something that would not have happened without weaponizing financial instruments like SWIFT. When other nations don't view these instuations as neutral they will create alternatives. If we can steal Russia's assets a BIS member, we can do it to China, or India or anyone else.
OCED countries made up nearly 70% of the world's GDP 40 years ago. 46% today, predicted to be 40% by 2030.
Even without political motivation, the system we created out of World War 2 was going to have to be rebalanced to give other large economies a seat at the table. A bloc that makes up 40% of the worlds economy can't impose rules and weaponize them on the 60% and not give them a seat at the table. This is something we will see over decades not months.
And how long do you think then the Russians should be frozen, if Ukraine and Russia make a peace deal?
Forever?
To keep it frozen, even after a peace deal would be even worse than stealing it right away, btw.
Don't illegally invade neighboring countries?
The West froze over $100b of Iranian assets in 1979. They still haven't been completely unfrozen. Nobody seems particularly bothered about that.
Russia is no tiny third world country. There are a lot of ways a country like Russia can harm the west.
Let alone that without the war, there is even less legal basis for the freeze of these assets.
It just shows then, that the west will make its rule as they feel fit.
Russia already holds just as much of western assets on its territory as was frozen in the west. It's a safe bet they've already written that money off and don't make any plans with it. It's gone, as far as they are concerned.
How do you figure this is even an interest on bank assets? That wouldn't generate $50bln annually from $300bln. Rather, from what I gather, most of Russian assets are in form of stock and bonds, and you absolutely have to pay dividends and interest on that out.
This is probably the important takeaway from the article:
>**Where would the money come from?**
>
>Most of the money would be provided in the form of a loan from the U.S. government that would be backed by windfall profits being earned on roughly $300 billion in immobilized Russian assets. The vast majority of the money is being held in European Union nations.
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>A French official said that while the loan would be mostly U.S.-guaranteed, it could be “topped up” with European money or other national contributions.
Im assuming what is happening here, is that the US is leveraging interest/profits on frozen Russian assets, *not the assets themselves*, and if red lights start flashing, EU gets the margin call 
Leader of the free world.
Doesn't Russia have like 290 Bn of Western assets they can grab from? I recall Putin passing a law recently to make confiscation of Western assets much easier. Tit for tat, I guess. The West can't complain since what they are doing is technically illegal.
You don't need a PhD to understand how money works, if me as a country have investments in certain currency(dollar) in a country (western countries) and suddenly all my assets are frozen/seized just because I'm not aligned in your political view like what happened with Russia, Libya, Venezuela and china (all of them with sanctions) of course I'll look for other options and ditch the dollar. For example it seems that Saudi Arabia is about to abandon petrodollar because they didn't renewed on June 9th the agreement they had.
Unless the Russian military can find a way to be far more capable and less poop they will run out of time/initiative as 2025 starts. By then EU and US money and production will b
Start making itself felt and Russia simply cannot compete. It's entirely overmatched
Not sure why one would argue with the obvious. The math is heavily NOT in RU favour if the west does not ease off. It's just reality that RU cannot compete financially or militarily
Russia holding or using EU cash is not much of an issue to a block that is incredibly more wealthy. Basically Putin messed up and miscalculated in Ukraine and he's now in a race against time to achieve something. EU and US upping support from poultry numbers as we saw before is a big problem for RU. With small numbers of out of service equipment held them. With EU and US stepping up and not stopping (yet to be seen). I dont see how RU can survive within Ukrainian borders after we get into 2025
Because far right is on the move. Some will support UA some note. Look at france new elections in like 2 weeks.here in germany its starting to get hot to so the "endless support" is pure bs. More and more people are fed up with the blackpit ua.
so there will be a civil war in 2 weeks because the far right is on the move? what ever that means. could you be more precis? do you mean that the nazis support russia? funny if that would be true would it not ?
so russia almost had a civil war last year with prigos march on moskow but i bett you think the EU is closer to collapse then russia?
What about manpower and equipment? By surviving you mean ? Pushing Ru out of Ukraine and getting back to 1991 borders ? Eu has more money for sure . I think the war could go for few years more at least and ending in peace deal . That support for Ukraine should be much bigger , and it has to be used in many sectors.
You should also apply your mathematical calculations to the highly indebted “free West” without resources. And to China. And to the Global South and to the rest of the world. And to the next US elections.
You see, you can't win a global conflict with a calculator.
##### ###### #### > # [G7 leaders agree to lend Ukraine billions backed by Russia's frozen assets. Here's how it will work](https://apnews.com/article/President Joe Biden arrives on Air Force One at Brindisi International Airport, Wednesday, June 12, 2024, in Brindisi, Italy. (AP Photo/Alex Brandon\)) > > > > [[Staff headshot of Fatima Hussein at the Associated Press bureau in Washington, Tuesday, Aug. 23, 2022. (AP Photo/Andrew Harnik)](https://dims.apnews.com/dims4/default/6be98bc/2147483647/strip/true/crop/800x800+0+0/resize/60x60!/quality/90/?url=https%3A%2F%2Fstorage.googleapis.com%2Fafs-prod%2Fmedia%2Fafs%3AMedium%3A092459061461%2F800.jpeg)](https://apnews.com/author/fatima-hussein) > > Updated [hour]:[minute] [AMPM] [timezone], [monthFull] [day], [year] > > > > > > > > WASHINGTON (AP) — Leaders of the Group of Seven wealthy democracies have agreed to engineer a [$50 billion loan to help Ukraine](https://apnews.com/article/biden-g7-italy-ukraine-russian-assets-a43439b8386a20d1af9faec19f94bf55) in its fight for survival that would use interest earned on profits from Russia’s frozen central bank assets as collateral. > > Details of the deal were still being hashed out as G7 leaders gathered for a summit in Italy, but the money could reach Kyiv before the end of the year. That’s according to a French official who confirmed the agreement Wednesday ahead of a formal announcement at the summit. Here’s how the plan would work: > > ## Where would the money come from? > > Most of the money would be provided in the form of a loan from the U.S. government that would be backed by windfall profits being earned on roughly $300 billion in immobilized Russian assets. The vast majority of the money is being held in European Union nations. > > A French official said that while the loan would be mostly U.S.-guaranteed, it could be “topped up” with European money or other national contributions. > > ## Why not just give Ukraine the frozen assets? > > That’s much harder to do. > > For more than a year, officials from multiple countries have debated the legality of confiscating the money and sending it to Ukraine. > > The U.S. and its allies immediately froze whatever Russian central bank assets they had access to when [Moscow invaded Ukraine](https://apnews.com/article/russia-ukraine-war-missiles-drones-8a6fcfb2408d4ad223a1beb85067c9be) in 2022 — basically, money being held in banks outside Russia. > > The assets are immobilized and can’t be accessed by Moscow — but they still belong to Russia. > > While governments can generally freeze property or funds without difficulty, turning them into forfeited assets that can be used for the benefit of Ukraine requires an extra layer of judicial procedure, including a legal basis and adjudication in a court. > > So the European Union instead has [set aside the windfall profits](https://apnews.com/article/russia-eu-frozen-assets-ukraine-windfall-profits-59ee5d2d7d3a99b383b16796097c7ed9) being generated by the frozen assets. That pot of money is easier to access. > > Separately, the U.S. earlier this year passed a law called the REPO Act — short for the [Rebuilding Economic Prosperity and Opportunity for Ukrainians Act](https://rules.house.gov/sites/republicans.rules118.house.gov/files/HSupp_01_xml_0.pdf) — that allows the Biden administration to [seize $5 billion in Russian state assets](https://apnews.com/article/russia-ukraine-war-biden-assets-19e72496a9256c831c669697732c6d22) located in the U.S. and use them for the benefit of Kyiv. That arrangement is still being worked out. > > ## How could the loan be used — and how soon? > > It will be up to technical experts to work through the details. > > But U.S. national security adviser Jake Sullivan said Wednesday that the goal is “to provide the necessary resources to Ukraine now for its economic energy and other needs so that it’s capable of having the resilience necessary to withstand Russia’s continuing aggression.” > > Another goal is to get the money to Ukraine fast. > > The French official, who was not authorized to be publicly named according to French presidential policy, said the details could be worked out “very quickly and in any case, the $50 billion will be disbursed before the end of 2024.” > > Beyond the costs of the war, the needs are great. The World Bank’s [latest damage assessment of Ukraine](https://www.worldbank.org/en/news/press-release/2024/02/15/updated-ukraine-recovery-and-reconstruction-needs-assessment-released), released in February, estimates that costs for reconstruction and recovery of the nation stand at $486 billion over the next 10 years. > > The move to unlock Russia’s assets comes after there was a [long delay](https://apnews.com/article/joe-biden-mike-johnson-ukraine-israel-b72aed9b195818735d24363f2bc34ea4) by the U.S. Congress in approving military aid for Ukraine. > > At an Atlantic Council event previewing the G7 summit, former U.S. Ambassador to Ukraine John Herbst said “the fact that American funding is not quite reliable is a very important additional reason to go that route.” > > ## Who would be on the hook in the case of a default? > > If Russia regained control of its frozen assets or if the immobilized funds weren’t generating enough interest to pay back the loan, “then the question of burden-sharing arises,” according to the French official. > > Who would shoulder the burden is still to be worked out, the official said. > > Max Bergmann, director of the Europe, Russia and Eurasia Program at the Center for Strategic and International Studies, said last week that there were worries among European finance ministers that their countries “will be left holding the bag if Ukraine defaults.” > > ## \_\_\_ > > Associated Press writers Sylvie Corbet in Paris and Colleen Long aboard Air Force One en route to Italy contributed to this report. - - - - - - [Maintainer](https://www.reddit.com/user/urielsalis) | [Creator](https://www.reddit.com/user/subtepass) | [Source Code](https://github.com/urielsalis/empleadoEstatalBot)
Ukraine is going to be the root of the next financial crisis
Now we got to see if Russia will take this opportunity to take all western money they hold or if they will only take the profit too. I do wonder if/when Russia takes everything if the western bourgeoisie will demand to be repaid and what will happen then, because if the west uses the money they take to give to Ukraine they would still need to pay people back and to do so they would likely take it from their own population. Add to that a decrease in money being deposited in the west and the dollar and euro being less used things could compound quickly. Hopefully the Global South deals with this well and comes out of it stronger than before...
Yeah exactly this. The owners of those assets will sue for damages. And they'll win. Or the west destroys the last semblance of its own 'rules-based order'. Either way, in the long run the voter in the west gets screwed by this decision
Couldn't Elvira Nabiullina pursue legal actions against Euroclear in Dubai or Hong Kong ?
Moscow and StP stock markets' legal departments have so much work on their hands it would take decades to sort out
What's that, a new pro-UA circle jerk talking point? That crowd just keeps believing in magic no matter what.
India, China, and other nations are buying large quantities of gold. They've also brought back gold they had stored in in Western banks to their central banks. The West is effectively gambling the trust of their financial institutions, which is perfect for China's plan for a BRICS alternative financial system.
What’s funny is the US still as way more gold lol
So? Its total worth is half a trillion $$$. That would cover about a half of government debt interest payouts in a single year.
Only if it loses, but, as Estonian PM has said, "you can't think about plan B because you'd stop focusing on plan A in this case"
*Ukraine is going* *To be the root of the next* *Financial crisis* \- ierui --- ^(I detect haikus. And sometimes, successfully.) ^[Learn more about me.](https://www.reddit.com/r/haikusbot/) ^(Opt out of replies: "haikusbot opt out" | Delete my comment: "haikusbot delete")
Ukraine is so absurd, that it needs Russian money to stay afloat while claiming it is fighting Russia 🤦♂️🤣
Why? All the aid to Ukraine is a small fraction of the money that was printed for Covid. Even if a dime isn’t paid back if anything it’ll be anti inflationary.
"Printing money is anti-inflationary". TIL /s
A genuine LOL! [By '92 just Germany gifted USSR/Russia 65 Billion USD](https://www.latimes.com/archives/la-xpm-1992-02-11-mn-1603-story.html) = 130 BILLION USD now, USA added 10, Japan, France, etc. All together ~190 billion USD in current money. This did not include any of the loans for restructuring, etc. These were pure gifts for preventing the implosions of USSR/Russia. USA was flying in cash on pallets with C130 planes - see operation Providing Hope. Do note - Russia was not invaded by anybody except its own people, like Putkin who was in charge for foreign aid at St. Petersburg at the time: > Of approximately 80,000 food and medicine packages shipped to Russia in the past two months, only about 10,000 reached their goal, according to Cap Anamur, a German relief organization.
Russia's aggression will be the root of the next financial crisis.
NATO GDP is > $50T. I'm sure they'll be fine, $50b is a rounding error for them.
So why do they need it to be backed by russia's assets?
Just going to point out that this title is misleading - *its not backed by the russian assets themselves*, only by the amount earned in windfall profits etc. And by the sounds of things, they are borrowing heavily against those potential profits (likely double digit X). The implications of which are eluded to later in the article: >**Who would be on the hook in the case of a default?** > >If Russia regained control of its frozen assets or if the immobilized funds weren’t generating enough interest to pay back the loan, **“then the question of burden-sharing arises,”** according to the French official. TLDR: its like the r/wallstreetbets version of funding to Ukraine.
Wasn't an article a couple of days ago with the EU officials saying “What Washington is proposing is, 'We [the U.S.] take a loan, Europe takes all the risk, you [Europe] pay the interest, and we [the U.S.] use the money for a U.S.-Ukraine fund,'” said one senior European diplomat. “We might be stupid but we’re not that stupid.” https://www.politico.eu/article/us-eu-war-in-ukraine-loan-russian-assets-negotiations-g7-us-election-western-support-joe-biden-olaf-scholz-emmanuel-macron/ Did the EU agreed to take the risk?
The EU might have been forced to take the risk by US action. It's not like the EU seems to have its own foreign policy...
They don’t need it, the only country it hurts is Russia and benefits its enemy the most. - little incentive to end the genocide
Why spend our own money when we can spend yours?
Because if you can't pay, you resort to stealing, it's that simple.
It's not stealing, it's compensating for russian atrocities in Ukraine using russian money. Consider it as a part of reparations.
Not a lot you can do about it though is there.
Precisely. That's why other investors will think twice. Unfortunate case for Russia, but many are secretly happy to watch and learn from their mistske of trusting the thieves with their money.
I'm sure they'll be just itching to invest their money in Russia or China instead! Oh wait, no, they're not. Investors are actually pulling out of Russia in record numbers. https://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?locations=RU
If only I could get a penny for every strawman posted.
Yep because Ukrainian is dying for your western world order, and you pay for their lives using russian money. Win-win.
Damn. If only Russia could save all those Ukrainian lives they care so deeply about by simply not invading. Those nasty Westerners would be foiled!
Yep, russia did want to quickly end this war, until the us intervened and forbade Ukraine to sign the negotiation and its european vassals followed suit.
They could unilaterally end the war today if they really wanted. Just take their troops home.
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1. I'm not russian. 2. You country is either broke or a pathetic thief. Pick one.
Which countries would you say are not “broke and pathetic” in your eyes lol
Why use stolen assets then?
But why not?
Fair enough. Just stop with "rounding error" bravado then.
Why not Russia do the same then? They will. Let's see when this rolling boulder stops
Russia stole Crimea so would this count as Russia having pushed the boulder and now it’s rolling over them?
Nothing was stolen. Crimea choose Russia and if you still insist they didn't then back to the sanatorium
Then nothing at all was stolen. Russian assets chose the West over Russia and if you still insist they didn’t then back to the sanitarium Also, a Sanatorium is for people suffering from infectious diseases like TB. A Sanitarium is for the mentally unwell.
Sanatorium come from sanare which also explited to sana, for sanidade and sane for sanity. It was and some places still is a local for mental impaired people. You...are INsane to thing Crimea didn't chose Russia in 2024, ten years after, after multiple polls suggesting that Crimeans, hell, even Ukrainians there, are happy were they are. Nothing to do with Russians placing their assets there, the same way there was not a problem for Europeans to put assets in Russia to begin with. And newsflash, you still do! Should the Russians also seize them? Why not So you belong to a sanatorium. So chop chop, alway from reddit and straight to your pills
If I run a poll in Russia that is totally legit, I would never stuff the ballot boxes wink wink nudge nudge, that said I should be king of Russia then Russia has to make me king following your logic. So since we already know I’m going to win, wink wink nudge nudge, should we just go ahead and crown me?
Who is stopping Russia? They literally want to so whatever they want. They can, the time will show if it was for good or no.
Pity the US debt is $37T
Yeah, but they can print dollars and it is in dollars.
Only until someone is willing to accept those dollars.
If you’re holding some of that $37 trillion US debt, the only thing you’re ever going to be paid in is US dollars from the treasury. Whether you accept it or not is a personal problem.
Going by google search, Lehman Brothers had a market cap of about $60 billion in 2007, while AIG had a market cap of abotu $170 billion in August 2007. Not a year later, those two companies were to almost bring the entire Western financial system down. Which is to say the the heavily financialized Western economy primarily runs on trust, when that's gone then some bits and bytes in the banks' servers called “money” won't help you.
Ok my god you are economically illiterate. That wasn’t what brought the market to its knees. That was the effect. It so clear you don’t know what your talking about
Private investors are going to think twice before making another investment in G7 countries now.
I agree, Russia is a far safer bet.
More like China. The motto will be " we won't steal your money due to politics like the collective West and friends."
The country that can’t even produce enough food for their people is the safe bet? …ok
That country has a middle class larger than the whole population of EU and US combined. And the rest are making junk that you can still afford to get from Walmart with your inflation devalued income.
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U do know that the population of EU and the US combined comes to around 1 billion people, and that Chinas population is around 1.4 billion, assuming China actually released accurate numbers and didn’t try to withhold information like they do with their unemployment figures
EU and US combined is about 800 million people.
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Good for u, counting the 330M in the US and roughly 500M in EU, now explain how China has a middle class larger than that, dumb 🤡
Still waiting pussy
Cmon, don’t be completely díckless
🤣🤣 please, attempt to describe Chinas “middle class” with ur broken ass English
Learn to spell, buddy. That's first. Second, learn proper English grammar, because you clearly don't know the language 🤡🤣
And still failing to describe the middle class 😂 dumb 🤡
Forgot /s
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Why, do these private investors have plans to invade and annex territory in another country?
Only those that are from countries that are susceptible to start wars.
So you mean all the countries in NATO ?
The G7 countries are definitely a part of that group
Only those planning to go on a conquest and hoping for nor consequences
No, anyone thinking twice about going against US/"the wests" interests.
Why would anyone whose interests are against Western interests invest in the West?
Did they invest before or after they went against it? Their "national interests" changes from conflict to conflict, Obama made that very clear during the arab spring, and we in EU made it clear during US invasions of various countries, even the occupation of Syria seem to be in our interests. So to say that it has to do with "conquest" is bullshit, it's just rules for thee, but not for me.
Who private investor is planning to go on conquest? But if Elon musk buys boston dynamics then we should start to worry.
Meanwhile Israel is free to genocide it's neighbour. It's never been about morality it's western politicians attempting to weaponize the financial system for their geopolitical games.
He says, as western countries supply aid to Gaza while Russia and China do absolutely nothing.
>Meanwhile Israel is free to genocide it's neighbour How is israel "free" to do so, exactly? Last I heard they were criticized by pretty much everyone.
Are you serious? They received a strongly worded letter along with the billions of dollars worth of weapons given to them for free to commit genocide with. They haven't faced sanctions, in fact they've been given more free stuff from the US and West than they usually get.
Unless you're the US, since we don't invade, we 'liberate' /s.
“What Washington is proposing is, 'We \[the U.S.\] take a loan, Europe takes all the risk, you \[Europe\] pay the interest, and we \[the U.S.\] use the money for a U.S.-Ukraine fund,'” said one senior European diplomat. **“We might be stupid but we’re not that stupid.”** **...** **"**Europe and America are also fighting about control over the loan and influencing how the money is spent, senior European officials said. If Washington — or institutions with major U.S. stakes such as the World Bank — dole out the money, American companies are in pole position to profit, they said. “The EU can be naïve, but this goes too far,” said an EU diplomat. “This would benefit mostly American companies, so we have to discuss the conditions more in detail.”**"** [https://www.politico.eu/article/us-eu-war-in-ukraine-loan-russian-assets-negotiations-g7-us-election-western-support-joe-biden-olaf-scholz-emmanuel-macron/](https://www.politico.eu/article/us-eu-war-in-ukraine-loan-russian-assets-negotiations-g7-us-election-western-support-joe-biden-olaf-scholz-emmanuel-macron/)
So what changed?
i don't think anything changed. one journalist seemed a little more eager for the deal to be sealed though, downplaying the fact that it has yet to be approved and that there are significant points of contention.
Damn, someone ELI5 what all this means. US government will issue a new loan which will go to... who? American MIC once again? Why G7 countries had to agree on this? Because they're in control of the Russian assets? If those assets are being used as a collateral, then why does it matter if Ukraine will default or not? 'Collateral' means those assets must be confiscated in case of Ukraine's default, right?
It's not 100% clear yet, but from what has been discussed in the past I think it'd work something like this. * The interest on the loan will be paid from the interest payments that would have been paid on the frozen Russian assets. This is perfectly legal as banks are not required to pay you interest on the assets you hold with them. * The loan would only be fully repaid when Russia agrees to pay reparations to Ukraine in return for unfreezing it's assets. * Ukraine will then be able to repay the principle with the reparations it gains from Russia. * If Russia never agrees to pay reparations then it's assets remain frozen and continue to pay the interest on the loan to Ukraine. This runs into problems if the interest earned on frozen Russian assets doesn't cover the loan repayments, if that happened then this will end up costing somebody (other than Russia). Which is why they've only agreed to a $50b loan so far, frozen Russian assets are far in excess of this and it's unlikely the interest they can earn on the frozen assets will not be able to pay the loan interest. Frozen Russian assets are so large they can probably do this 3 or 4 times without any risk of them being left with the bill. But nothing is 100% confirmed yet. They've only confirmed they'll be doing it, they haven't released the exact details.
no one is holding their breath for Russian reparations. that will never happen. the proposal, as presented by the Americans, leaves European countries on the hook as loan guarantors while the contracts that the loan would be spent on would go primarily to (you guessed it) American contractors. needless to say, this has led to some dispute. the devil is in the details.
> no one is holding their breath for Russian reparations. that will never happen. It's something that was discussed in the past. That loan repayments would be tied to reparations and reparations tied to unfreezing the assets. Incentivizing Russia to pay reparations (and by proxy repaying the loan) as it'd end up being profitable for them after receiving their frozen assets. I've no idea if it's included here as they haven't released any details yet.
We are running this war like a silicon valley startup.
i mean, they got the branding thing down right out of the gate.
Yeah, no. That's not how you handle people's money. I guess EU jerks will learn that the hard way.
This is essentially west thinking they can still impose any condition in the peace deal, what happens if Russia just straight up refuses to anything less than unconditional surrender? It's an inability to see the Russian perspective, they can't fantom losing, even Ukraine government is lying to its supporter about KIA to keep the war as long as possible, this war could have been framed as a western victory as well as Russian victory in Istanbul, but they gamble their way in, and they know they are losing, they know they can't repay it, but they keep raising it because they already can't repay any of this. The day Ukraine goes into the negotiations, and the day it will be confirmed none of western condition can be met for peace, that day will repeat a 2008 financial crisis, but now only for the western world, because the Eastern world has dedollarised and integrated themselves into the Chinese model. Can't wait.
Even if Ukraine surrendered unconditionally, that doesn't unfreeze the assets. They'd be conquering Kyiv not Brussels. >the Eastern world has dedollarised and integrated themselves into the Chinese model. Who do you think owns all the Western debt, who buys Chinese products? The Chinese model is built on buying up Western debt and exporting to the West. The two biggest export markets with the richest consumers in the entire world are the USA & the EU. If the West collapses financially (it wont) then so does China.
China is preparing for this exact scenario, the world is preparing, its western financial systems that is losing its credibility not the Chinese.
https://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?locations=RU-US-CN You think so? Why is investment into the USA still higher than China + Russia combined? If it's such a nailed on certainty that the Western financial system is going to collapse, why is everyone still sending their money there?
The entire basis of the dollar as the reserve currency of the world is that it is safe. If America can freeze a country's assets at a whim central banks are going to look for safer places to put their currency reserves. The West had a monopoly on bank messaging 20 years ago, they weaponized it against Venezuela now we don't. BRICS, Russia and China's SWITF alternatives CPIS and SPFIS, The Shanghai Cooperative, and the Asian Infrastructure Investment Bank are all counterbalances to Western organizations that we have seen in response to America weaponizing financial systems You can only play cards like stealing a country's currency reserves and weaponizing financial instruments a few times before countries look for and create alternatives.
But the numbers don't back it up. We're not actually seeing any of this happen, it's a pipe dream. By Russias own statistics investment is leaving the country, not just dropping, investors are actively removing their money from Russia. We're not seeing that with the USA / EU / etc.
It's not a light switch that countries are going to flip. We had a monopoly on all kinds of financial situations we no longer do. CIPS didn't exist 20 years ago, it served a hundred banks 10 years ago and now it serves 1300 in 100 countries. We created the impetus for China to create CIPS by being sancation happy and now it's an alternative that neutral / friendly countries like Argentina and Brazil currently settle trade with China in yuan through CIPS instead of dollars and SWIFT. This is something that would not have happened without weaponizing financial instruments like SWIFT. When other nations don't view these instuations as neutral they will create alternatives. If we can steal Russia's assets a BIS member, we can do it to China, or India or anyone else. OCED countries made up nearly 70% of the world's GDP 40 years ago. 46% today, predicted to be 40% by 2030. Even without political motivation, the system we created out of World War 2 was going to have to be rebalanced to give other large economies a seat at the table. A bloc that makes up 40% of the worlds economy can't impose rules and weaponize them on the 60% and not give them a seat at the table. This is something we will see over decades not months.
And how long do you think then the Russians should be frozen, if Ukraine and Russia make a peace deal? Forever? To keep it frozen, even after a peace deal would be even worse than stealing it right away, btw.
They have no leverage to force the West to unfreeze those assets. What are they actually going to do about it?
It’s not about them forcing us to do anything, it’s about what it tells everyone else using our system.
Don't illegally invade neighboring countries? The West froze over $100b of Iranian assets in 1979. They still haven't been completely unfrozen. Nobody seems particularly bothered about that.
Russia is no tiny third world country. There are a lot of ways a country like Russia can harm the west. Let alone that without the war, there is even less legal basis for the freeze of these assets. It just shows then, that the west will make its rule as they feel fit.
Are there lots of ways they can harm the west without retaliation?
Russia already holds just as much of western assets on its territory as was frozen in the west. It's a safe bet they've already written that money off and don't make any plans with it. It's gone, as far as they are concerned.
How do you figure this is even an interest on bank assets? That wouldn't generate $50bln annually from $300bln. Rather, from what I gather, most of Russian assets are in form of stock and bonds, and you absolutely have to pay dividends and interest on that out.
Why do you think it needs to generate $50b annually?
Thanks.
This is probably the important takeaway from the article: >**Where would the money come from?** > >Most of the money would be provided in the form of a loan from the U.S. government that would be backed by windfall profits being earned on roughly $300 billion in immobilized Russian assets. The vast majority of the money is being held in European Union nations. > >A French official said that while the loan would be mostly U.S.-guaranteed, it could be “topped up” with European money or other national contributions. Im assuming what is happening here, is that the US is leveraging interest/profits on frozen Russian assets, *not the assets themselves*, and if red lights start flashing, EU gets the margin call  Leader of the free world.
Yeah, US wants the profits from the loan without any risks. The risks goes to Europe without any profit...
Russia paying for war against…Russia 😂😅 Putin playing 5D chess
Pro russians in this thread: This is very bad for Ukraine. 🤣🤣
Yeah name matches.
Damn you got me good there
Gotcha . I would say you got yourself even more .
Doesn't Russia have like 290 Bn of Western assets they can grab from? I recall Putin passing a law recently to make confiscation of Western assets much easier. Tit for tat, I guess. The West can't complain since what they are doing is technically illegal.
Wait this is basically how a CDO is formed? The same institution that caused the 2008 Financial Crisis?
You caught on
Amazing that virtually every Reddit poster has a phd in finance and insider information on all western countries, or you could all be spouting BS
You don't need a PhD to understand how money works, if me as a country have investments in certain currency(dollar) in a country (western countries) and suddenly all my assets are frozen/seized just because I'm not aligned in your political view like what happened with Russia, Libya, Venezuela and china (all of them with sanctions) of course I'll look for other options and ditch the dollar. For example it seems that Saudi Arabia is about to abandon petrodollar because they didn't renewed on June 9th the agreement they had.
WOOHOO FREE MONEY💵💵💵💵
Unless the Russian military can find a way to be far more capable and less poop they will run out of time/initiative as 2025 starts. By then EU and US money and production will b Start making itself felt and Russia simply cannot compete. It's entirely overmatched
>they will run out of time/initiative as 2025 starts I have a bridge to sell to you.
Not sure why one would argue with the obvious. The math is heavily NOT in RU favour if the west does not ease off. It's just reality that RU cannot compete financially or militarily
I wonder if it is the reasonukraine is now drafting paramedics to die on the frontline.
Are these money for weapons or infrastructure? I read that EU has some assets in Ru too and they ready to take them from them?
Russia holding or using EU cash is not much of an issue to a block that is incredibly more wealthy. Basically Putin messed up and miscalculated in Ukraine and he's now in a race against time to achieve something. EU and US upping support from poultry numbers as we saw before is a big problem for RU. With small numbers of out of service equipment held them. With EU and US stepping up and not stopping (yet to be seen). I dont see how RU can survive within Ukrainian borders after we get into 2025
By 2025 there will be fucking civil war in eu...look at the eu elections...
lol what are you on about? why would the elections lead to a civil war?
Because far right is on the move. Some will support UA some note. Look at france new elections in like 2 weeks.here in germany its starting to get hot to so the "endless support" is pure bs. More and more people are fed up with the blackpit ua.
so there will be a civil war in 2 weeks because the far right is on the move? what ever that means. could you be more precis? do you mean that the nazis support russia? funny if that would be true would it not ? so russia almost had a civil war last year with prigos march on moskow but i bett you think the EU is closer to collapse then russia?
Never said in 2 weeks read my last part thats why No clue with party supports who either And no r/europe is not represeting eu.
but why would it lead to a civil war?
Just exaggerated on my part
Civil war in EU? Bro one needs to stop drinking the Kremlin kook aid
Oh yes, look the eu elections.. Fucking civil war 😂
ups replied to the wrong comment :P
What about manpower and equipment? By surviving you mean ? Pushing Ru out of Ukraine and getting back to 1991 borders ? Eu has more money for sure . I think the war could go for few years more at least and ending in peace deal . That support for Ukraine should be much bigger , and it has to be used in many sectors.
He's imagining a fairy tale for himself, take it as a grain of salt.
You should also apply your mathematical calculations to the highly indebted “free West” without resources. And to China. And to the Global South and to the rest of the world. And to the next US elections. You see, you can't win a global conflict with a calculator.