G7 considers using frozen Russian assets to fund Ukraine
The G7 group, comprised of the United States, Germany, France, Italy, Japan, the United Kingdom, and Canada, continues to discuss how to use frozen Russian assets as collateral in new bond issues. The proceeds would be directed to support Ukraine. This approach would aim to raise money without the complications often associated with asset seizures, according to a report in Finance Times.
The report notes that the funds raised could come with a repayment obligation for Russia. If Russia fails to repay, the frozen sovereign assets could be tapped to satisfy the debt, providing a potential mechanism to ensure accountability while supporting Kyiv.
A source cited in the article described a plan where proceeds from the frozen assets would be used to finance Ukraine, with the legal pathway for asset seizure bypassed through bond-based funding. This would create a new avenue for allied support that sidesteps ongoing legal disputes over asset ownership and enforcement.
On another front, Katrin Goering-Eckardt, deputy speaker of the Bundestag, urged that not only the interest income from frozen Russian assets, but all funds held by the Central Bank of Russia within the European Union, should be made available to Ukraine’s needs.
Earlier this year, EU discussions moved closer to approval of a European Commission proposal for using proceeds from frozen Central Bank of Russia assets. The aim is to channel these funds to support Ukraine while managing legal challenges and political considerations across member states.
Analysts have warned about the broader implications of asset seizures and the potential effects on global markets and geopolitical stability. The ongoing debate reflects differing assessments of how best to balance sanctions, international law, and humanitarian assistance for Ukraine.