G7 fails to agree on how to use frozen Russian assets

The G7 Finance Ministers' Conference ended on May 25.

At the conference, participants addressed global economic trends, plans for financial assistance to Ukraine and the multilateral development banking sector.

After a three-day conference in the northern Italian city of Stresa, G7 Finance Ministers and Central Bank Governors issued a joint statement assessing that the global economy has shown “higher-than-expected resilience” amid many challenges.

The joint statement noted that “the labor market remains relatively strong and inflation continues to be moderate, although core inflation is persistent, particularly in the services sector.”

However, global growth is expected to remain below historical averages and the global economic outlook “is subject to downside risks amid heightened geopolitical tensions and volatile energy prices.”

The statement confirmed that the G7 had agreed on the goal of supporting Ukraine and implementing that direction by maximizing the potential profits from frozen Russian assets in Europe “to benefit” Kiev, but must strive to comply with the provisions of international law.

Speaking to reporters, Italian Finance Minister Giancarlo Giorgetti said the parties had made progress on the issue, but it was not yet complete due to technical and legal issues.

Meanwhile, Italian Central Bank Governor Fabio Panetta explained that the G7 needs to assess the pros and cons, because this issue "could impact the functioning of the international monetary system".

The final decision on using the profits from frozen Russian assets to support Ukraine will be made at the G7 Summit, scheduled to take place in June in the Apulia region of southern Italy - the country currently holding the rotating G7 presidency.

Earlier the same day, Russian media quoted the country's Finance Minister Anton Siluanov as saying that Moscow would respond if Western countries "illegally used Russian assets."

On May 23, Russian President Vladimir Putin also signed a decree allowing the country to take US assets, including securities, to compensate for Moscow's assets frozen and confiscated by Washington.