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Using Russian funds to help Ukraine will need creativity

Diplomats preparing for next week’s summit of leaders of the G7, the group of the world’s seven largest economies, will need to be creative to find ways to leverage profits generated by Russian assets frozen in the West and help Ukraine, officials said on Friday. fair (7).

Leaders from the United States, Japan, Canada, France, Germany, Italy and the United Kingdom will meet from June 13 to 15, and the discussion on how to best use immobilized Russian funds is among the main ones on the agenda.

The issue has been under consideration for weeks and G7 chiefs had hoped to make significant progress at their meeting in Borgo Egnazia, an exclusive resort in the south-eastern region of Puglia, south-eastern Italy.

A German government official told reporters on Friday he did not expect a final decision to be made at the summit, but a senior Italian official said diplomats were working hard to overcome numerous technical problems.

“I am confident that the diplomatic creativity and complex language of diplomats can often help in these cases when there is genuine political will,” said the Italian official, who has been following the discussions closely.

Around 260 billion euros of Russian central bank funds are frozen around the world, most of them in the European Union, generating around 3.5 billion euros a year in profit.

Some European Union governments would like to use some of the interest income and invest most of it in weapons purchases and rebuilding Ukraine, which was devastated by the 2022 Russian invasion.

The United States, on the other hand, is pushing to use the profits as a source of stable income to repay a large loan of 50 billion dollars that could be obtained in the market.

Russia claims that any diversion of profits from its frozen funds would be considered theft.

An Italian official said one of the problems is that Russian funds are frozen in Europe under a sanctions regime that needs to be renewed unanimously by all 27 EU governments every six months.

“If you take out a loan that is repaid over 50 or 10 years, how can you use the profits on an asset that you know is only frozen for six months? This is one of the most challenging technical difficulties we are considering,” the official said.

“It’s purely technical, it’s not a question of will.”

Source: CNN Brasil

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