ROME- G7 finance chiefs meeting in Italy this week will attempt to find common ground over how to use frozen Russian assets to help Ukraine’s war effort and how to address China’s growing export strength in key markets, officials said.
Finance ministers and central bankers from the Group of Seven wealthy democracies – the United States, Japan, Germany, France, Britain, Italy and Canada – will gather in the northern Italian lakeside town of Stresa on Friday and Saturday.
G7 negotiators have been discussing for weeks how to best exploit some $300 billion worth of Russian financial assets, such as major currencies and government bonds, which were frozen shortly after Moscow invaded Ukraine in February 2022.
The United States is pushing to find a way to bring forward the future income from those assets, either through issuing a bond or more likely granting Ukraine a loan that it says could provide it with as much as $50 billion in the near term.
However, many legal and technical aspects need to be hammered out, meaning a detailed accord is not expected to be reached in Stresa, several officials said.
In that case, informal talks are set to continue aimed at presenting a proposal to G7 heads of government who will meet in Puglia, southern Italy, on June 13-15.
The idea of the G7 issuing a bond for Ukraine appears to have lost ground, with the US now proposing a loan backed by the income stream from the frozen assets.
Who would administer the loan – the World Bank or some other body – how it would be guaranteed, how future profits can be estimated and what would happen in the event of a peace deal with Russia are all aspects still to be clarified.
European officials are particularly cautious, with one EU diplomat saying it would take “weeks if not months” for a final decision to be made.
Italy holds the G7 presidency this year and its Economy Minister Giancarlo Giorgetti said last week the US proposals on the use of the Russian assets had “quite serious legal implications” which still need clarifying.
Japanese Finance Minister Shunichi Suzuki also stressed any agreement must comply with international law.
Russia has repeatedly warned the West of consequences if its assets are touched and accused Washington of bullying Europe to take more radical steps to thwart it in Ukraine.
The prospects for global trade will be another central topic in Stresa after the United States last week unveiled steep tariff hikes on an array of Chinese imports including electric vehicle batteries, computer chips and medical products.
