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G7 to Use Frozen Russian Assets for $50 Billion Ukraine Loan

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The G7 has agreed to utilize frozen Russian assets to raise $50 billion (£39 billion) for Ukraine to aid in its defense against Russian forces. President Joe Biden emphasized this decision as a signal to Russia that the support for Ukraine remains steadfast. However, Moscow has warned of “extremely painful” retaliatory actions. The funds, anticipated to be available by the end of the year, are intended to support Ukraine’s war effort and economic stability in the long term.

At the G7 summit in Italy, Ukrainian President Volodymyr Zelensky and Biden signed a 10-year bilateral security agreement between the US and Ukraine, which Ukraine hailed as “historic.” This agreement involves US military and training aid but does not commit US troops to combat. It aims to enhance Ukraine’s defense capabilities, support its defense industry, and aid in economic and energy recovery. It also stipulates consultations at the highest levels in case of future Russian attacks on Ukraine to decide necessary support measures.

Separately, about $325 billion in Russian assets were frozen by the G7 and the EU following Russia’s 2022 invasion of Ukraine. These assets generate approximately $3 billion annually in interest. The G7 plan involves using this interest to cover the annual interest on a $50 billion loan for Ukraine, sourced from international markets.

President Biden, at the summit in Puglia, Italy, reiterated that the $50 billion loan would support Ukraine and send a strong message to Russian President Vladimir Putin. Zelensky expressed gratitude for the continued support from the US and other allies, calling the security deal with the US the strongest since Ukraine’s independence in 1991. Other G7 leaders, including UK Prime Minister Rishi Sunak, praised the loan deal as transformative.

The $50 billion loan compares significantly with the $61 billion in US military aid agreed upon in May. A senior White House official noted the loan would support various needs, including military, budget, humanitarian, and reconstruction efforts. While the frozen funds’ interest is seen as a symbolic victory for Ukraine, some in Kyiv had hoped for the release of the entire $300 billion frozen fund. However, the European Central Bank opposed this, citing risks to international order.

The funds from the loan will not immediately impact the war, as they are expected later in the year. Ukraine continues to seek more immediate military aid, such as air defense systems and F-16 fighter jets, which could start arriving in the summer. Zelensky mentioned that the new security agreement includes US shipments of these aircraft.

The loan arrangement symbolizes a significant move where Russia’s frozen assets are repurposed to support Ukraine’s defense. Although this marks a turning point, it is unlikely to change Russia’s stance on the war. Most of the frozen Russian central bank assets are in Belgium, and international law prevents their direct confiscation for Ukraine’s benefit. Russia has condemned the West’s actions as criminal and has hinted at severe retaliatory measures. European investors have around €33 billion stuck in Russia, complicating the situation further.

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Biden Authorizes Ukraine to Target Certain Sites in Russia Using US Arms

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US President Joe Biden has reportedly authorized Ukraine to utilize American-supplied weaponry to target specific sites within Russia, particularly in the vicinity of the Kharkiv region. This directive aims to enable Ukraine to retaliate against Russian forces attacking or preparing to attack them.

Recent advances by Russian forces in the Kharkiv region, close to the Russian border, have prompted this decision. Despite this, the United States maintains its stance against allowing the use of long-range strikes or the Army Tactical Missile System (ATACMS) within Russian territory.

Regarding the possibility of targeting Russian aircraft, US officials stated that Ukraine has not been prohibited from defending itself against Russian planes flying over Russian soil. While the UK and some European leaders have expressed openness to relaxing restrictions on the use of Western-supplied weapons by Ukraine, the US has previously been hesitant due to concerns about escalation.

However, recent events have prompted a shift in this approach, as indicated by US Secretary of State Antony Blinken during a visit to Moldova. Russian forces have taken advantage of opportunities to advance further into Ukrainian territory, particularly in Kharkiv, amid delays in the arrival of additional Western weapons to Ukraine.

Recent attacks, including the bombing of a supermarket and a residential building, have resulted in civilian casualties and extensive damage, with Ukrainian officials accusing Russian forces of targeting civilian infrastructure.

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Wagner Group Leader Yevgeny Prigozhin Believed to Have Died Following Plane Crash in Russia

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Russian mercenary leader Yevgeny Prigozhin was reportedly among the passengers aboard a Russian jet that crashed, resulting in the deaths of all 10 individuals on board. The crash occurred in the Tver region, northwest of Moscow. Social media linked to the Wagner mercenary group have suggested that Prigozhin’s private plane was shot down by Russian air defenses. The Grey Zone Telegram channel stated that Prigozhin died due to actions by traitors to Russia.

Prigozhin had previously led a failed mutiny against the Russian armed forces in June, though some experts believe the mutiny was staged, and he abandoned his “justice march” on Moscow after direct orders from President Vladimir Putin. The crash coincided with reports of the removal of senior Russian general Sergei Surovikin, who was known to have a connection with Prigozhin. The crashed aircraft, an Embraer-135, was en route from Moscow to St Petersburg with seven passengers and three crew members.

An investigation has been initiated into the crash, and all 10 bodies have been recovered. The Wagner mercenary group, which Prigozhin was associated with, has been involved in various conflicts including those in Ukraine, Syria, and West Africa, and is known for its brutality. Prigozhin’s mutiny had created tensions with Russian military commanders and President Putin.

President Putin’s initial response to Prigozhin’s challenge to Russia’s defense establishment was strongly negative. The circumstances surrounding Prigozhin’s death, if confirmed, have raised speculation, with some eyebrows being raised about the possibility of deliberate targeting. US President Joe Biden expressed that he was “not surprised” by the news of Prigozhin’s potential death.

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