Hungary to suspend G7 loan to Ukraine until after US election By Reuters

By Jan Strupczewski

LUXEMBOURG (Reuters) – Hungary will keep a final deal on a $50 billion G7 loan to Ukraine until after the U.S. presidential election, delaying its decision on when to renew EU sanctions against Russia, Hungary’s finance minister said.

Washington needs the EU to review its deadline for renewing sanctions every three years, up from the current six months, to contribute about $20 billion to the G7 loan, equal to the European Union’s contribution, EU officials said.

The remaining $10 billion will be provided by G7 members Canada, Britain and Japan, who are already on board.

The loan, agreed in principle by G7 leaders in June, will be serviced with proceeds from about $300 billion of Russian central bank assets frozen in the West after Moscow invaded Ukraine in early 2022.

Washington does not want to worry every six months about whether or not the Russian assets backing the loan will remain frozen, officials said.

“We believe that this issue, the extension of Russian sanctions, should be decided after the US elections. We need to see in which direction the future American administration is heading with this issue”, said the Minister of Finance, Mihaly Varga, in a press conference.

The European Union said the proceeds from all Russian assets frozen in the West could finance a loan of up to 45 billion euros ($49.44 billion).

Because most of the assets are in Europe, the EU has said it can provide up to 35 billion euros for the G7 loan. This amount would be reduced by the amount that the United States will contribute.

The issue will be discussed further at the G7 finance ministers meeting in Washington at the end of October, but Hungary’s decision means that the final contributions of each of the G7 countries will not be decided until after the November 5 elections.

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