G7 leaders agree on plan for $50 billion loan to Ukraine

Italy's Prime Minister Giorgia Meloni, U.S. President Joe Biden, French President Emmanuel Macron, Canada's Prime Minister Justin Trudeau, German Chancellor Olaf Scholz, Britain's Prime Minister Rishi Sunak and Japan's Prime Minister Fumio Kishida attend a session on Africa, climate change and development on the first day of the G7 summit Thursday at the Borgo Egnazia resort in Savelletri, Italy. (Yara Nardi/REUTERS)

Italian Prime Minister Giorgia Meloni, European Council President Charles Michel, British Prime Minister Rishi Sunak, German Chancellor Olaf Scholz, Canadian Prime Minister Justin Trudeau, Japanese Prime Minister Fumio Kishida, European Commission President Ursula von der Leyen, French President Emmanuel Macron and U.S. President Joe Biden stand together on the first day of the G7 summit, in Savelletri, Italy, June 13, 2024. REUTERS/Yara Nardi

U.S. President Joe Biden and Ukrainian President Volodymyr Zelenskiy shake hands on the day of signing a new security agreement between the United States and Ukraine, in Fasano, Italy, June 13, 2024. REUTERS/Kevin Lamarque REFILE - CORRECTING LOCATION FROM "SAVELLETRI" TO "FASANO".

The United States and the other large Group of 7 economies agreed Thursday on a plan to give Ukraine a $50 billion loan to help it buy weapons and begin to rebuild damaged infrastructure at a crucial moment in the war, when Russia has the momentum on the battlefield.

The loan is expected to be repaid using interest earned on $300 billion in frozen Russian assets, which are mostly in European banks. Announced at a G7 summit in southern Italy, the loan will be underwritten by the United States, but American officials say they expect their allies, including members of the European Union, to provide some of the funds.

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President Joe Biden also will signal a long-term U.S. commitment to Ukraine by signing a 10-year security agreement with President Volodymyr Zelenskyy, an administration official said. Biden and the Ukrainian leader are expected to hold a joint news conference Thursday.

Biden is trying to convince allies that the United States will continue backing Ukraine even if former President Donald Trump, who has spoken openly of pulling the United States out of NATO, prevails in the November election. But if reelected, Trump could abandon any security agreement with Ukraine, underscoring the political challenges shadowing Biden and other G7 leaders.

NEW RUSSIAN SANCTIONS

The United States and the other large Group of 7 economies agreed Thursday on a plan to give Ukraine a $50 billion loan to help it buy weapons and begin to rebuild damaged infrastructure at a crucial moment in the war, when Russia has the momentum on the battlefield.

The loan is expected to be repaid using interest earned on $300 billion in frozen Russian assets, which are mostly in European banks. Announced at a G7 summit in southern Italy, the loan will be underwritten by the United States, but American officials say they expect their allies, including members of the European Union, to provide some of the funds.

Biden is trying to convince allies that the United States will continue backing Ukraine even if former President Donald Trump, who has spoken openly of pulling the United States out of NATO, prevails in the November election. But if reelected, Trump could abandon any security agreement with Ukraine, underscoring the political challenges shadowing Biden and other G7 leaders.

Biden has tried before to choke off supplies and financing to Russia, and overestimated the effects of that move. In March 2022, shortly after the war began, he announced an initial round of financial actions and declared, “As a result of these unprecedented sanctions, the ruble almost is immediately reduced to rubble.” It was not. After a brief dive, it recovered, and while today it is not as strong as it was a year ago, the Russian economy has been expanding because of the strength of war-related growth.

Much of that is thanks to China’s effort. It has been buying Russian oil, often at a discount to world prices. And it has ramped up its sale of dual-use goods, especially the microelectronics and software needed to manufacture weapons systems, drones and air defenses.

The result has been the rise of a somewhat parallel war economy involving Russia, China, Iran and North Korea. Many of the firms subject to sanctions are in Hong Kong or just over the border in Shenzhen, the technology manufacturing center of China. Yet administration officials insist that this time, they can choke off what has become a deepening commercial relationship.

In announcing new restrictions on Chinese firms, the Biden administration is also hoping to spur European governments and possibly Asian allies to take similar measures.

POPE’S FIRST ATTENDANCE

As leaders from the Group of 7 nations gather this week in southern Italy, they will be joined by representatives from countries at the center of international conflict, from developing nations such as Brazil and India, and, for the first time, from the Holy See.

Pope Francis, the Vatican announced, will take part in a discussion Friday on the ethical implications of artificial intelligence at a session that is open to envoys from countries that are not G7 members. The Vatican said Francis would also have bilateral conversations with some of the visiting leaders, including President Joe Biden and Turkey’s Recep Tayyip Erdogan.

Prime Minister Giorgia Meloni of Italy, who invited him, said the pope’s presence would “make a decisive contribution to defining a regulatory, ethical and cultural framework” for AI, adding that his participation “brings prestige to our nation and to the entire Group of 7.”

Francis’ participation in the summit comes as the 87-year-old pope was reported this week to have used again an offensive slur to refer to homosexuality, the same pejorative he was accused of using last month. The reports last month prompted a backlash among LGBTQ+ people, toward which the pope had generally adopted a more welcoming approach.

The pope’s G7 presence breaks with a long tradition in the Catholic Church of refusing such invitations on the basis that a pontiff does not need state leaders or anyone else to offer him a platform to speak, said Alberto Melloni, an Italian church historian.

“The pope already has the floor,” Melloni said.

But in this case, Francis, who has a record of breaking with conventional behavior, might see the summit as a high-profile opportunity to send another loud message on ending conflicts such as the wars in Ukraine and the Gaza Strip, Melloni said.

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