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US Pushes for Ukraine Aid at G7 Meeting05/24 06:15

   The U.S. sought to build support for squeezing more money for Ukraine out of 
frozen Russian assets and for uniting against China's trade practices as 
finance ministers from the Group of Seven rich democracies opened a two-day 
meeting on Friday on the shores of northern Italy's scenic Lago Maggiore.

   FRANKFURT, Germany (AP) -- The U.S. sought to build support for squeezing 
more money for Ukraine out of frozen Russian assets and for uniting against 
China's trade practices as finance ministers from the Group of Seven rich 
democracies opened a two-day meeting on Friday on the shores of northern 
Italy's scenic Lago Maggiore.

   U.S. Treasury Secretary Janet Yellen is pushing at the meeting in Stresa for 
"more ambitious options" to unlock money from some $260 billion in Russian 
central bank reserves frozen in Europe and the U.S. after the Feb. 24, 2022, 
invasion.

   Aid for Ukraine has become more urgent as Kyiv's finances look shakier 
against the prospect that the conflict will last through next year and beyond, 
and as Russia steps up its destruction of civilian infrastructure such as power 
stations.

   The U.S. Congress has passed legislation allowing the Biden administration 
to seize the roughly $5 billion in Russian assets located in the US, but most 
of the funds are in Europe. Citing legal concerns, European officials have 
balked at outright confiscating the money and handing it to Ukraine as 
compensation for the destruction caused by Russia. Instead they plan use the 
interest accumulating on the assets, but that's only around $3 billion a year 
-- about one month's financing needs for the Ukrainian government.

   Proposals include borrowing against the future interest income from the 
frozen assets, so that Ukraine could be given as much as $50 billion 
immediately.

   Host Finance Minister Giancarlo Giorgetti said that extracting more for 
Ukraine "legally is a very complicated discussion but also politically 
sensitive."

   French Finance Minister Bruno Le Maire praised Yellen for setting aside a 
proposal that he said would have undermined international rule of law, and 
added that "the U.S. proposal is now consistent with international law."

   "Let's compare the proposals, let's see what is the most convenient, the 
most efficient, the most rapid proposal that could be put in place," he said. 
"The key point is not the method that we use, the key point is to ensure the 
right and strong and longstanding financing of the Ukrainian government."

   Ukraine spends almost all its tax revenue on the military and needs another 
$40 billion a year to continue paying pensions and the salaries of doctors, 
nurses and teachers. Support from allies and a $15.4 billion loan from the 
International Monetary Fund was initially thought to have secured the budget 
for four years, but the prospects of an extended conflict have darkened the 
outlook for next year.

   Yellen has also called for a clear united front against China's state 
subsidies for manufacturing of solar panels, semiconductors and electric cars, 
saying that China's production capacity exceeds the needs not only of China but 
of the global economy as a whole and threatens the existence of competing 
companies in both Group of Seven and developing countries. Ahead of the meeting 
she said that countries needed to take a common stance so that China's leaders 
understand that "they face a wall of opposition to this strategy that they are 
pursuing."

   The finance ministers are working to set up final decisions at the summit of 
G7 leaders that will take place June 13-15 in Fasano, in southern Italy's 
Puglia region.

   The G7 is an informal forum that holds an annual summit to discuss economic 
policy and security issues. The member countries are Canada, France, Germany, 
Italy, Japan, the United Kingdom and the United States. Representatives of the 
European Union also take part, but the EU does not serve as one of the rotating 
chairs.

 
 
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