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G7 leaders did not agree on frozen Russian assets, pledge decision in June

G7 leaders did not agree on frozen Russian assets, pledge decision in June European Central Bank President Christine Lagarde (Getty Images)
Author: Maria Kholina

Finance ministers from the Group of Seven (G7) countries gathered in Washington failed to reach an agreement on how to utilize frozen Russian assets to support Ukraine. They will continue working on possible options to present to G7 leaders ahead of the summit in Italy in June, according to Financial Times and Reuters.

After inconclusive debates, G7 ministers stated, "We reaffirm our determination to ensure that Russia pays for the damage it has caused to Ukraine. Russia’s sovereign assets in our jurisdictions will remain immobilized until then, consistent with our respective legal systems."

"We will continue to work on all possible ways in which frozen Russian sovereign assets can be used to support Ukraine in accordance with international law and our respective legal systems, with a view to informing our leaders ahead of the Puglia summit in June," the statement said.

Disagreements within G7 on use of Russian assets

FT explains that Washington supported the idea of ​​full confiscation of assets worth 260 billion euros and their transfer to Ukraine. However, European officials fear that this could violate international law and destabilize financial markets.

Speaking ahead of the G7 finance ministers' meeting, European Central Bank President Christine Lagarde said that the US proposals are causing serious concern among lawyers, including within the American administration.

"Moving from freezing the assets, to confiscating them, to disposing of them is something that needs to be looked at very carefully," Lagarde said, warning that this could "start breaking the international legal order that you want to protect, that you would want Russia and all countries around the world to respect."

EU countries propose to currently only give Ukraine the profit received from underlying assets. But currently, Ukraine needs larger sums as additional US assistance is stalled in Congress.

"We're talking through a number of different options. One of them is seizure, but another is collateralizing, or even using the windfall profits or the interest from these assets to fund a loan," said US Treasury Secretary Wally Adeyemo.

French Finance Minister Bruno Le Maire said that the interest from Russian assets is estimated at 3 to 5 billion euros per year, depending on the level of interest rates.