France Aims for G-7 Deal on Russian Assets After US Proposal

(Bloomberg) -- The French government backed a US a proposal to tap frozen Russian assets for Ukraine’s benefit, raising the prospect of a deal this week at a meeting of Group of Seven finance ministers.

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The US is pushing for the group of leading advanced economies to leverage future revenue generated from about $280 billion in Russian central bank funds — most of which lies immobilized in Europe. The plan could unlock an aid package of as much as $50 billion for Ukraine.

“We are open to the idea of mobilizing the income of these assets as best as possible and as much in advance as possible within international law,” Finance Minister Bruno Le Maire said in a briefing to journalists before the G-7 meeting in Stresa, Italy.

European governments had previously been cautious about how to use the assets, citing concerns of legal risks and financial stability. Le Maire said he has previously warned US authorities that seizing assets outright would contravene international law and the rules of the global financial system.

“The US has made proposals that are in the framework of international law and we will work on them in a constructive and open way with the objective to get an agreement on this fundamental subject of financial support for Ukraine by the end of the Stresa G-7,” the finance minister said.

With Germany also warming to the US plan, the chances are increasing that it could be fully endorsed by a meeting of G-7 leaders June 13-15.

An advantage of front-loading the proceeds from the assets would be to secure the benefit for Ukraine regardless of political uncertainty surrounding the presidential election.

Divisions in Washington have already made it difficult for President Joe Biden to extend more aid to Ukraine, and his challenger, former President Donald Trump, has expressed skepticism about support for the embattled country.

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