What impact will the security deal between Ukraine and USA have? | DW News

What impact will the security deal between Ukraine and USA have? | DW News

the US and Ukraine have signed a 10-year bilateral security agreement on the sidelines of the G7 Summit in Italy Ukrainian President Vladimir zilinski said The Pact would protect not just his country but the world from Russian aggression G7 leaders also backed a multi-billion dollar deal to use frozen Russian assets to help Ukraine strengthen its defenses and pay for reconstruction leaders of the world’s seven Advanced democracy and the European Union sorted out an emergency parachute for Ukraine on day one of the G7 leaders Summit in Italy they agreed to use the interests generated by Russia’s Central Bank funds that have been frozen in European Banks to create a $50 billion loan facility for Ukraine we’re not talking about the confiscation of these assets but the interest that acrs over time our finance ministers are now working out the mechanisms it is a clear sign to the Russian president he cannot simply sit this mattera out and hope that he will be able to win this war because of fiscal problems in some countries that are currently supporting Ukraine he won’t Ukraine’s President Vladimir zalinski was invited to attend attend the 3-day Summit he signed a 10-year security agreement with the United States which includes greater intelligence sharing military training and weapons manufacturing our goal is to strengthen Ukraine’s credible defense and deterrence capabilities for the long term a lasting peace for Ukraine must be underwritten by Ukraine’s own ability to defend itself now and to deter future aggression any time in the in the future zinsky calls the agreement historic and hopes it will secure Ukraine’s place in NATO the issue of NATO is covered through the text of the agreement it states that America supports Ukraine’s future future membership in NATO and recognizes that our security agreement is a bridge to Ukraine’s me membership in NATO the G7 leader are standing firm against Russia now but it’s not clear how United they will be if NATO’s biggest backer the US gets a new president one who is not so willing to support Ukraine William Courtney from the think tank Rand explained what impact the agreement is likely to have for Ukraine well it is a historic agreement it’s not just the US agreement a number of European countries have also signed similar agreements the main purpose is to send a political signal to Russia that Europe and the United States the West are fully behind Ukraine and as it defends itself against Russian aggression but also to provide a greater degree of certainty over the long term uh for the kind of assistance military assistance especially that Ukraine will receive from the West well by stressed that this security agreement is meant for the long run as you mentioned but if Donald Trump is reelected president in November could that jeopardize the agreement uh yes in fact all the countries are are democracies and so no government today can uh make a pledge for all future governments and whether it’s the us or European country uh if president U Trump is the next president uh that could have some impact no question but by putting in place agreements like this building a stronger political consensus uh in uh the alliance as well as in the countries that make up the alliance this makes it a little harder for governments in the future uh to turn away now many G7 leaders are facing problems at home you know we’re speaking of dwindling support from their voters inflation migration tensions linked to the Middle East crisis how much weight does the this group still have on the international stage well G7 is still the organization that uh so many countries around the world look up to as the organization that does an awful lot to preserve what people call the international rules-based order uh a fair equal treatment of countries around the world in so many economic and other areas so for example so many world leaders which are not members of G7 have come to the G7 meeting that’s a sign of how important these countries regard the G7 that’s William cotney from Think Tank Rand thank you so much for joining us you’re quite welcome well Jakob kirkgard is with the German Marshall fund think tank in Brussels his work focuses on trade and economics he’s also worked for the Danish Ministry of defense and for the UN in Iraq welcome to DW with the basics is this G7 plan even legal can you just freeze billions of dollars of a country’s assets and then do whatever you like with the interest on it well I mean I don’t know if I would go as far as to say it’s unprecedented but I certainly consider it legal uh given that uh Russia is engaged in an illegal war of aggression against a neighboring country uh and these assets uh are already seized within Western financial institutions and this would be a loan so how would that work who would uh Ukraine pay it back to and who takes the hit if a Ukraine crippled by War can’t pay it back well the loan will be seemingly issued by a Syndicate of uh different lenders presumably a mixture of public and private Banks from around the G7 um and if you know I mean this this loan is obviously predicated on Ukraine ultimately winning the war and uh and then as part of a long-term peace settlement winning reparations from Russia from which the repayment of the loan would come uh obviously in the event that Ukraine does not win the war uh then the holders or the issuers of those loans would have to uh uh I mean Ukraine would not be able to repay it uh and and you know the G7 be stuck with the bill so the good news here is that by agreeing to this loan the G7 is very much putting their own money on the line to secure a Ukrainian Victory and doesn’t a move like this open up the US and Europe particularly to reprisals what’s to stop Russia doing exactly the same seizing European property and other assets well I think that’s very likely that this might happen uh but I would also say that uh those particularly European companies that are still operating in Russia will do so knowing uh that this risk of of arbitrary nationalization by the Russian government was always there uh hopefully these such companies will already have written down the asset value of their Russian operations to zero that certainly in my opinion would be the prudent thing to have done or they will have taken out appropriate risk Sovereign Risk insurance against these types of nationalizations so the bottom line is that yes I think we should expect Uh Russian appraisals against European particularly firms in Russia but these countries are not a group of companies that I could feel sorry for they knew the risk so this loan is said to be uh something like $50 billion how far will that go well I mean it’s important to understand that this is $50 billion on top of earlier commitments by for instance the European Union uh which has pledged 50 billion EUR until 2027 there is still an ongoing IMF program uh that also provides funds for the Ukrainian government and of course the US Congress recently appropriated a sizable amount of money as well uh so uh this money the F the whole pot of money therefore in my opinion certainly for the short to medium term and by that I mean the next 18 18 months or so at a minimum should provide Ukraine the financial capacity to continue to resist Russian aggression and so what will it be used for this particular 50 billion dollar pot what’s that been earmarked for well it’s a little unclear yet except that the G7 uh the the the sort of WR or readouts from the G7 statement that is likely to be published tomorrow indicates that different parts of the loan will be earmarked for you know reconstruction some of it for uh outright military purchases and some of it for if you like uh broad-based budget support for the for the for all the different expenses of the Ukrainian government wages and and other things so it’s really uh likely to be a mixture uh that obviously also uh uh reflects the most urgent need uh for of the Ukrainian government uh when this Lo loan becomes available at the end of the year it may may be at that time that military uh purchases are more important than reconstruction or perhaps vice versa we don’t know yet and why stop at the interest on these seized Russian assets why not use the actual 300 billion dollars or so in Russian assets that the EU and G7 have seized well there there if you do that I think there might be uh concerns about the legality of such a move and there’s certainly in some European capitals noticeably uh Germany but also former Colonial Powers France and Italy will be concerns about legal precedent uh because these are obviously countries that have a history both during World War II uh and earlier during the colonial era uh from which they may there may be entities around the world that wish to sue them uh so therefore uh there’s has clearly been resistance uh among European government to go to the outright seizure of the underlying assets there’s also this issue that uh the EU knows that they are going to be providing the majority of the funds for reconstructing Ukraine after the end of the war uh and therefore uh if you were to seize the underlying assets today to provide weapons you might be cannibalizing uh so to speak the put of money that would be available uh to pay for reconstruction after the war thanks for talking us through that so clearly yob kirkgard from the German Marshall fund

The US and Ukraine have signed a ten-year bilateral security agreement on the sidelines of the G7 summit in Italy.
Ukrainian President Volodymyr Zelenskyy said the pact would protect not just his country, but the world, from Russian aggression. G7 leaders also backed a multi-billion dollar deal to use frozen Russian assets to help Ukraine strengthen its defenses and pay for reconstruction.

00:00 $300 billion in frozen Russian assets to support Ukraine
02:49 William Courtney, Senior analyst at RAND
05:16 Jakob Kirkegaard, German Marshall Fund

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