G7 to Back EU Plan Utilizing Frozen Russian Assets for Ukraine Aid

EU | May 17, 2024, Friday // 10:55|  views

According to an official from the Italian Ministry of Finance, finance ministers from the Group of Seven (G7) nations, scheduled to meet in Italy next week, are set to endorse a European Union proposal. This plan involves utilizing funds from frozen Russian assets to support Ukraine's efforts in the ongoing conflict, as reported by Reuters.

Italy, currently holding the rotating chairmanship of the G7, aims to reinvigorate discussions on an international agreement regarding the taxation rights of large corporations. The United States has faced challenges in gaining congressional approval for this deal, the official stated during a media briefing.

Following Russia's military incursion into Ukraine in February 2022, the G7, comprised of the US, Japan, Germany, France, UK, Italy, and Canada, collectively froze approximately 300 billion USD worth of Russian financial assets. Since then, deliberations have centered on whether and how to utilize these funds to aid Ukraine, Reuters noted.

Initially, the US proposed seizing Russian assets entirely, but Europe raised concerns over potential risks to the euro and legal complexities. In response, the US suggested using Russian assets as collateral for loans to Ukraine, encountering resistance from European nations.

The unnamed Italian official indicated that the G7 is likely to endorse the EU's stance on using the "extraordinary income" from frozen Russian assets to benefit Ukraine.

The upcoming meeting of G7 finance ministers, scheduled for May 24-25 in Stresa, northern Italy, will primarily focus on discussions regarding the utilization of proceeds from frozen Russian assets rather than the assets themselves, as noted by the Italian representative. Any decision made must have the support of the EU and be legally sound.

Additionally, trade relations with China will be on the agenda for the Stresa meeting, although not officially listed. Italy is cautious about utilizing tariffs as a means of exerting pressure due to concerns about disruptions to global trade.

As the trade truce between the US and several European countries regarding taxes on digital services nears expiration in June, Italy will advocate for further negotiations to prevent the collapse of plans for a global minimum tax on multinational corporations. However, discussions on this matter have shown little progress ahead of the upcoming G7 meeting, according to the Italian official.

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Tags: G7, Russia, assets, Ukraine


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