RUSSIAN Frozen Assets Used for $50 Billion Loans to Ukraine as G7 Agrees Deal Structure
Video Summary
The Russian economy has been severely impacted by international sanctions since its invasion of Ukraine in 2022. At the time of the invasion, Russia’s total assets were estimated to be $612 billion, with $375 billion held in foreign institutions. However, due to the invasion, these assets were frozen, and Russia was initially able to move around $90 billion of its assets out of these institutions, leaving $285 billion frozen. The frozen assets have been generating around 4% interest per year, earning around $20 billion over the past two years.
There have been two main camps on what to do with these frozen assets: the US and UK pushing for all $285 billion to be used for Ukraine’s defense, while the European Union has taken a more conservative approach, suggesting that they only skim off the interest generated by the assets. The G7 has now agreed on a plan to use the interest generated by these assets to fund loans to Ukraine. The plan involves issuing bonds worth $50 billion, which will be serviced using the interest generated by the frozen assets. This plan has been met with criticism from Russia, with President Putin labeling it as “theft” and claiming that it will not go unpunished.
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