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$15bn aid to Ukraine to be central to G7 meeting – Reuters

$15bn aid to Ukraine to be central to G7 meeting – Reuters

The G7 countries intend to approve a package of short-term financing for Ukraine in the amount of about $15 billion. The package will cover the country’s three-monthly needs.

It is reported by RBC-Ukraine with reference to Reuters.

Treasury ministers and central bank governors from the US, Japan, Canada, the UK, Germany, France and Italy hold talks in Germany May 19-20.

“We must ensure the liquidity of the Ukrainian state. I am very optimistic that at this G7 meeting we will be able to increase funding that will allow Ukraine to defend itself over the next months,” German Finance Minister Christian Lindner told reporters before the start of negotiations.

The European Commission proposed on Wednesday to provide Ukraine with loans of up to 9 billion euros through EU loans guaranteed by EU governments to cover the needs of Kyiv until the end of June.

Japan will double its aid to Ukraine to $600 million to help it meet its short-term needs, Prime Minister Fumio Kishida told reporters Thursday.

The European Commission has also proposed the creation of a fund of unspecified grants and loans for Ukraine, possibly through joint EU loans, to pay for its post-war reconstruction.

Some economists estimate that such a project would require between €500 billion and €2 trillion, with estimates often changing depending on the duration of the conflict and the extent of the destruction.

With such amounts coming into play, the EU is considering not only a new joint borrowing project modeled after the pandemic recovery fund, but also the confiscation of frozen Russian assets in the EU as sources of funding.

Some countries, such as Germany, however, say the idea, while politically interesting, will have shaky legal grounds.

US officials stress that it is too early to plan funding for a massive recovery plan for Ukraine, and Washington wants discussions to focus on Kyiv’s immediate budgetary needs over the next three months.

“At the end of the day, these recovery needs are mostly in the future. That’s why we’re more focused on Ukraine’s budgetary needs over the next three months than on reconstruction, Marshall plans and asset forfeiture,” a US Treasury spokesman said.

Recall, the head of the European Commission, Ursula von der Leyen, said that the European Commission will provide Ukraine with a new package of macro-financial assistance for 9 billion euros. The money will be allocated in 2022.

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