The United States proposed to the Group of Seven (G7) countries that they establish a special-purpose vehicle (SPV) to issue $50 billion in bonds from profits generated by frozen Russian assets and use the proceeds to support Ukraine, Bloomberg reported on March 21.
Western countries have immobilized around $300 billion of the Russian central bank's assets since the start of the full-scale invasion. Washington, Brussels, and Kyiv have long discussed legal ways of channeling these funds to aid Ukraine's reconstruction efforts.
The SPV would reportedly employ around $280 billion of these funds and use them to back "freedom bonds." The Group of Seven comprises the U.K., Canada, France, Germany, Italy, Japan, and the U.S.
Earlier this year, G7 countries announced they were developing strategies to issue debt to support Ukraine, utilizing Russian assets as a safety net for repayment.
U.S. President Joe Biden also recently backed U.S. legislation that would allow the confiscation of some frozen Russian funds and funnel them to Ukraine after months of not supporting the outright seizure of the assets.
The Biden administration is under significant pressure to develop new aid pathways as the U.S. Congress continues to drag its feet in passing further aid to Ukraine.
Holdups in U.S. assistance have put a significant strain on Ukraine's efforts to resist Russian aggression, causing ammunition shortages and contributing to the loss of a key front-line city of Avdiivka.
The World Bank assessed early in 2023 that the total cost of Ukraine's reconstruction would amount to $411 billion. Ukrainian Foreign Minister Dmytro Kuleba commented earlier this year that the full amount of Russian assets could cover over 80% of recovery costs.
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