Ukraine fights against Russia. As the war continues, Kiev faces a crucial period away from the conflict. Kick-off with the Reconstruction Conference in Berlin, an opportunity to guarantee Kiev billions of euros for defense, the production of defense systems and weapons, to repair and build new and more modern energy plants, as has desired by the president Volodymir Zelensky.
From the Berlin Conference to the G7
Then, from the 13th to the 15th, on the occasion of the G7 in Puglia – with the participation of Zelensky on the afternoon of the 13th – a possible agreement on the issue of frozen Russian assets will be discussed: Italian sources assure that “there is a broad consensus on the need to find additional resources” to continue financing the war, but also for budget support and for the reconstruction of Ukraine.
The modalities are currently being discussed. At the meeting of finance ministers in Stresa a small step forward was made. The topic is technically very complex. But the political commitment to do more is there. The United States has proposed a 50 billion loanto be guaranteed with the proceeds of Russian funds frozen at Euroclear, the Belgian company that holds the majority of the immobilized assets.
The issue to be resolved now is to identify a mechanism to link the commitments made at G7 level with those at EU level, also taking into account a series of technical issues, including the methods of guaranteeing a loan with assets frozen only for six months in six months, based on decisions of the European Council. The hope of the Italian presidency of the G7 is that a solution will be found through “diplomatic bureaucracy”.
The summit in Switzerland without Russia
Finally, about forty leaders – no one from Russia or even China – will participate in the peace conference for Ukraine which will be held on Saturday and Sunday in the Bürgenstock resort in Switzerland. Presented as a “peace conference”, the summit does not expect to reach any agreement between the parties in conflict, given the absence of one of the parties involved, as well as the countries that have close ties with Moscow. The Kremlin dismissed the summit as a Western propaganda event.
However, diplomats and the Swiss government believe it could serve as a prelude to further talks that could possibly include Russia. In addition to the peace proposal put forward by Volodymir Zelensky, humanitarian issues, nuclear safety, freedom of navigation and food safety will be discussed.
500 billion are needed for reconstruction
In Berlin, where the conference will continue until today, the definition of 95 investment projects that should be covered by Western funds, as well as a series of reform objectives, is planned. Also under discussion is the ‘fourth dimension’ of the conference programme, namely, Kiev’s accession to the European Union.
The World Bank estimates that almost $500 billion will be needed to reconstruct Ukraine over the next 10 years. “The day after tomorrow, President Zelensky and I will meet again at the G7 in Puglia. I will speak out strongly in favor of broad-based and long-term commitments to support Ukraine,” said German Chancellor Olaf Scholz in his opening speech. of today’s international reconstruction conference.
In July, 1.5 billion euros of proceeds from frozen Russian assets will be transferred to Ukraine, and already this month, 1.9 billion dollars under the Ukraine Facility, the European Union’s financial assistance program, he explained the outgoing President of the Commission, Ursula von der Leyen.
“We have always said that Russia must be held accountable for its crimes and now we are forcing it to pay,” he added, specifying that the objective of the conference is to look beyond Ukraine’s immediate needs and to define a “path credible towards the economic rebirth of the country”.
Russian assets frozen
Last month the EU finalized a deal to use profits from Russian Central Bank assets frozen in so-called central securities depositories, such as Euroclear, to finance Ukraine’s defense. Since the beginning of the war, 260 billion euros have been frozen worldwide of assets of the Russian Central Bank, of which approximately 210 billion in the EU. At the G7 we will discuss – recalled von der Leyen – how to speed up the process by which Ukraine can benefit from these assets.
The EU’s Ukraine Facility has an overall budget of 50 billion euros for 2024-2027. The granting of financing, one third of the sum, and loans, two thirds, are granted on the basis of the implementation of the reforms requested in Kiev.
Zelensky specified in Berlin that Kiev intends to build 1 gigawatt of gas-fired electricity generators this year and 4 in the coming years. Russian raids have destroyed 9 GW of capacity since last March. Last year, consumption was 18 Gw.
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