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G7 financial leaders seek common ground on Russian assets

G7 financial leaders seek common ground on Russian assets Illustrative photo (Getty Images)
Author: Maria Kholina

At the meeting of G7 financial leaders in Italy this week, an attempt will be made to reach an understanding on how to use frozen Russian assets to help Ukraine, according to Reuters.

Finance ministers and central bank chiefs of the Group of Seven wealthy democracies - the United States, Japan, Germany, France, the United Kingdom, Italy, and Canada - will gather in the northern Italian coastal city of Stresa on May 24 and 25.

G7 negotiators have been discussing for several weeks how best to use approximately $300 billion in Russian financial assets that were frozen shortly after Moscow's invasion of Ukraine in February 2022.

US plan

The United States is seeking ways to increase future revenues from these assets, either by issuing bonds or, more likely, by providing a loan to Ukraine, which could secure up to $50 billion in the near future.

However, numerous legal and technical issues need to be worked out, meaning that a detailed agreement is not expected to be reached in Stresa, several officials said.

In this case, informal talks will continue with the aim of presenting a proposal to the G7 heads of government, who will meet in Apulia, southern Italy, from June 13-15.

The idea of the G7 issuing bonds for Ukraine seems to have lost traction, as the US now proposes a loan backed by the revenue stream from the frozen assets.

Who would administrate the loan - the World Bank or another entity - how it will be guaranteed, how future revenues can be assessed, and what will happen in the event of a peace agreement with Russia are all aspects that still need to be clarified.

European officials are showing particular caution: one EU diplomat said that making a final decision would take "weeks if not months."

This year, Italy holds the G7 presidency, and its Economy Minister Giancarlo Giorgetti stated last week that the US proposals for using Russian assets have "quite serious legal implications" that still need clarifying.

Japanese Finance Minister Shunichi Suzuki also emphasized that any agreement must comply with international law.

As reported by RBC-Ukraine, in April, the foreign ministers of the Group of Seven postponed the issue of transferring Russian assets to Ukraine until June, when the G7 leaders will meet. A plan for using the assets to help Ukraine is expected to be ready by that time.