G7 leaders on Thursday agreed to lend Ukraine $50 billion generated from frozen Russian state assets on the first day of a summit that also saw the US sign a 10-year security deal with Kiev to ensure the country can continue to defend itself against Russia.
US President Joe Biden hailed the steps taken at the summit as a sign that Russian President Vladimir Putin "cannot wait us out."
"You cannot divide us and we will be with Ukraine until they prevail in this war," Biden said during a joint press conference with Ukrainian President Volodymyr Zelensky on Thursday evening.
His remarks came after he and Zelensky signed a long-term agreement laying out Washington's security relationship with Kiev on the sidelines of the G7 in southern Italy on Thursday.
Fifteen other countries have already concluded similar long-term security agreements with Kiev including Britain, France and Germany.
The US agreement broadly regulates cooperation between the two countries at all possible levels, including with regard to military equipment, training and manoeuvres.
At the same time, Ukraine is called upon to implement various reforms in the areas of justice, law enforcement and fighting corruption, but also in military capabilities and structures to achieve NATO standards in the future.
US pact doesn't include deployments, specific weapons
As expected, the agreement does not contain any commitments to deploy US armed forces for the defence of Ukraine. Biden has always categorically ruled this out - despite recent appeals from French President Emmanuel Macron to send military trainers there.
Washington says the aim is rather to enable Ukraine to continue to defend itself. The agreement also makes no promises to supply specific weapons systems.
Biden did, however, raise Ukraine's hopes that it might soon receive additional Patriot air defence systems from Western allies, saying five countries had made commitments for Patriot batteries and other air defence systems.
Washington has already provided Kiev with one of the advanced air defence systems, and could reportedly pledge a second one in the coming days, though the government has not officially confirmed this.
Russia invaded Ukraine at the end of February 2022 and has been waging a large-scale war of aggression against the neighbouring country ever since.
The US is Kiev's most important ally in the defence campaign. Both sides had been negotiating the bilateral security agreement for some time.
G7 pledge $50bn loan from frozen Russian assets
Earlier, the summit in southern Italy began with an agreement to lend Ukraine $50 billion using interest generated from frozen Russian state assets, in a major show of support for Kiev.
The Group of Seven leaders - which includes Britain, Canada, France, Germany, Italy, Japan and the United States - said an agreement had been reached on the large loan package.
Kiev is set to use the money to strengthen its defence, pay for the reconstruction of infrastructure and fund the state budget.
Planning for the structure of the loan package has been under way for some time. The US had originally campaigned in favour of collecting not only the interest income, but also the frozen assets themselves and using them to provide financial support to Kiev.
The US government says around $280 billion of Russian central bank money has been immobilized in Western countries due to sanctions imposed since Russia began its full-scale attack on Ukraine more than two years ago. The bulk of the Russian money is within the European Union.
The Brussels-based financial institution Euroclear - by far the largest holder in the EU of frozen Russian central bank assets - recently said that it had collected around €4.4 billion ($4.7 billion) in interest in 2023.
But some European countries had major reservations about using both the principle and the interest, resulting in the compromise in which the interest is used as collateral to pay off the loan.
US steps in in case politics changes the loan picture
One thorny issue is who would bear the credit risks if the EU sanctions on the assets could not be extended, for instance due to the veto of a member state. That would mean that the interest could no longer be used to pay off the loan.
On Thursday the US declared its willingness to bear the main burden of the multibillion-dollar loan, a high-ranking US government representative said on the sidelines of the summit.
The US is willing to provide up to $50 billion, or the total amount of the loan to Kiev, the US official said, though he emphasized: "We will not be the only lenders," adding others would also participate.
Moscow angry at loan for Ukraine
Russia criticized the loan to Ukraine. "Using the funds effectively stolen from Russia for the warlike adventures of the Kiev regime is criminal and cynical and represents a further blow to international law," said Russian Foreign Office spokeswoman Maria Zakharova at a press briefing.
She threatened that the Russian reaction would be "painful" for Brussels.
