Russian assets plan for aiding Ukraine to dominate G7 meet

G7 finance ministers have gathered in Italy on Thursday for a three-day meeting dominated by plans to use Russian assets to help Ukraine, as well as new sanctions on Moscow and the commercial threat posed by China.

The ministers and central bankers from the Group of Seven world powers are meeting in Stresa, on the shores of northern Italy’s Lake Maggiore, to prepare for the larger summit of G7 heads of state next month in Puglia.

Top of the agenda is a plan to finance crucial aid to Ukraine using the interest generated by the 300 billion euros ($325 billion) of Russian central bank assets frozen by the G7 and Europe.

The United States has proposed granting Ukraine, which has been fighting a Russian invasion for more than two years, up to $50 billion in loans secured by this interest.

“It’s vital and urgent that we collectively find a way forward to unlock the value of Russian sovereign assets immobilised in our jurisdictions for the benefit of Ukraine,” US Treasury Secretary Janet Yellen said this week.

The details of the US plan have not yet been finalised, including who would issue the debt — the US alone or G7 countries as a whole.

But it will serve as a basis for G7 discussions, according to a Treasury source in Italy, which as G7 president this year is hosting the Stresa talks.

The US proposal is an “interesting way forward” but “any decision must have a solid legal basis”, the source said.

Time is of the essence, as the slow speed of European material reaching Kyiv and the near-halt in US aid for months during wrangling in Washington have strained Ukraine’s capabilities just as Russia has regained the initiative on the ground.

In addition to the United States and Italy, the G7 includes Britain, Canada, France, Germany and Japan.