The Borgo Egnazia summit is set to announce the allocation of a loan with an estimated amount of up to 50 billion euros for the reconstruction of Ukraine. However, there are still differences between the US and Europe on a fundamental point that need to be resolved before this can happen.
John Kirby, the spokesperson of the US National Security Council, expressed optimism about the possibility of using frozen Russian funds for Ukraine’s reconstruction during a recent press briefing before the G7 meeting. Despite months of preparatory work and legal issues, progress has been made in resolving these challenges.
The White House has requested that the European Union act as a guarantor for the loan, as they do not intend to take on full responsibility for repayment. The European Council could approve this plan without unanimity, bypassing any potential Hungarian veto. On the other hand, Congressional approval would be needed in the US before this can happen, which could be challenging given current political climate in country.
During a previous G7 Finance Summit, there was an agreement in principle to use returns on Russian assets for Ukraine’s reconstruction. However, there are still unresolved issues such as transferring funds to Kiev and potential opposition from countries like Hungary that need to be addressed before this plan can become reality.
