STRESA, Italy: G7 finance chiefs are not expected to agree on details of a loan for Ukraine at their meeting in Italy starting on Friday, several officials said, leaving much work ahead in coming weeks or months to secure more financing for the war-torn country.
The United States has been pushing its allies to agree to a loan backed by the future income from some $300 billion of Russian assets frozen shortly after Moscow invaded Ukraine in February 2022.
US Treasury Secretary Janet Yellen has said the loan could amount to some $50 billion, but that no amounts have been agreed. Other G7 officials involved in the negotiations voiced caution, citing thorny legal and technical aspects to be hammered out.
“With great difficulty we have found a compromise for the use of the interest (already accrued),” Italian Economy Minister Giancarlo Giorgetti told reporters, referring to a deal already struck by the European Union.
“The problem is how the legal basis for this can be used for future profits.”
Giorgetti, who will chair the meeting as Italy holds the G7 presidency this year, said finding a solution “will not be simple,” and added that several central banks had expressed reservations over the US proposal.
Finance ministers and central bank chiefs from the Group of Seven industrial democracies — the US, Japan, Germany, France, Britain, Italy and Canada — are meeting in the northern Italian lakeside town of Stresa on Friday and Saturday.
One European official said the communique at the end of the meeting would probably include an agreement on a loan in principle, but no details.
“I don’t think there will be any numbers,” the official said when asked about the $50 billion figure.
“There will be no decisions on the matter taken at Stresa,” another European official said.
German Finance Minister Christian Lindner also said many questions remained open and he did not expect the G7 to reach any concrete decision at the Stresa gathering.
In that case, officials will continue to negotiate in the hope of making progress by the time G7 heads of government meet in the southern Italian region of Puglia on June 13-15.
Yellen, at a news conference on Thursday, said she expected a “general agreement on the concept” of using the earnings from Russian assets to provide Ukraine with significant financial support beyond 2025.
A key condition for European Union countries, where most of the assets are held, is to not confiscate the asset principal and harness only the earnings.
Giorgetti said a loan backed by future income from the frozen assets would meet with Russian retaliation, and stressed any deal must have a “solid legal basis,” echoing comments made this week by Japanese Finance Minister Shunichi Suzuki.
Under the proposal being discussed, the loan would be disbursed to Kyiv in one lump sum, Giorgetti said, and could possibly be issued by the G7 countries directly rather than through a global financial institution such as the World Bank.