Federal Finance Minister Christian Lindner is setting off for Italy this Thursday. Immediately after the ceremony marking the 75th anniversary of the Basic Law, the FDP leader will get on the plane. His goal: The finance ministers and central bank heads of the seven leading western industrialized countries (G7) meet in Stresa, on Lake Maggiore. Representatives of the International Monetary Fund and the World Bank will also be present, as will the guest countries Mauritania, Brazil, India, Korea and Saudi Arabia. And: The Ukrainian Finance Minister will also take part in a round of talks.
Until Saturday lunchtime, the focus in Stresa will be on the state of the global economy, international taxation and development and climate protection financing. The acute trade dispute between the USA and China is also likely to be discussed. But the focus will be on something else: Ukraine and how the country can be helped financially in the longer term.
However, there is a difference of opinion in the G-7 circle on this topic. This concerns the billions in assets of the Russian central bank, which were frozen worldwide in response to Russia’s war of aggression against Ukraine, which violated international law. It is currently being discussed whether and how these funds could be used to support Ukraine financially and militarily.
Roughly speaking, the US’s idea is to exploit the assets themselves – or at least use them as collateral to take out loans that could then flow to Ukraine. The EU, on the other hand, only decided this week to use the interest income from the frozen Russian central bank assets to finance further military aid for Ukraine.
Interest income is expected to be between 2.5 and three billion euros per year. That’s not nothing, but considering that, according to the EU Commission, assets totaling 260 billion euros are frozen – around 210 billion of which are in the EU – three billion would be a fairly manageable sum.
For Germany, government spokesman Steffen Hebestreit said on Wednesday: “Our position remains: It is about the income from the frozen assets. It is not about the assets themselves.” The background to the more cautious German and EU position is legal concerns.
However, in Germany it cannot be ruled out that there could ultimately be further use of the funds – if this were possible in a legally secure manner. From circles in the Federal Ministry of Finance it was said on Wednesday that they would discuss this in Stresa. “We are open to further suggestions on how to better leverage these assets,” said a government official. If there is a “legally viable mechanism” to make the financial flows from the frozen assets even more usable, “then we are certainly ready for it.” French Finance Minister Bruno Le Maire said, according to agency reports, that the G-7 group must find a unified line. He is ready to discuss the American proposals.
Even if there is still no agreement on this issue and there will be intensive discussions on Lake Maggiore, a profound dispute within the group is unlikely to occur in Stresa. On the one hand, G-7 meetings – unlike those in the much larger G-20 circle – are a more informal format, with an almost informal character. And on the other hand, the use of the frozen assets is a question whose final answer the finance ministers will save for the G-7 summit of their heads of state and government in mid-June in Apulia.