The economic ministers of the G7 group, meeting in Stresa (northern Italy) announced this Saturday that progress has been made in using the benefits of frozen Russian assets to help Ukraine and that they are determined to increase sanctions. to the Eurasian giant, according to the final document after the summit.
“We are advancing our discussions on four possible pathways to shift windfall profits from frozen Russian sovereign assets to the benefit of Ukraine, in accordance with international law and our respective legal systems, with a view to presenting options to provide additional financial support to Ukraine. Ukraine to our leaders before the Apulia summit in June,” the final document reads.
The economy ministers of France, the United Kingdom, Germany, Canada, Italy, the United States and Japan also announced “that, in accordance with their respective legal systems, Russia’s sovereign assets will remain frozen until Russia pays for the damage it has caused.” to Ukraine.” However, during this meeting, in which the Minister of Finance of Ukraine, Serhiy Marchenko, participated, no agreement was reached on the possible legal framework or the amount to allocate and any decision was postponed to the G7 of heads of state and Government.
The agency already froze about $300 billion in Russian assets — most of them are in Europe — shortly after Moscow invaded its neighbor in February 2022.
The United States would have proposed using the benefits of frozen Russian assets through a loan. However, as the Italian Minister of Economy, Giancarlo Giorgetti, announced in the press conference after the G7 meeting, there are still “technical and legal” aspects to address for a final agreement.
The entity that brings together the G7 Economy assured that financial and economic sanctions “are already having a clear impact by restricting Russia’s ability to finance and support its illegal invasion of Ukraine” and reiterated the commitment “to apply more financial sanctions and economic measures to reduce Russia’s sources of revenue and its ability to wage war against Ukraine, including by continuing to target Russia’s energy revenues and future extractive capabilities.”
The text adds that, where appropriate, they are “willing to impose sanctions on individuals and entities that help Russia acquire advanced materials, technology and equipment for its military industrial base.” The document also “strongly condemns the growing military cooperation between North Korea and Russia” and calls on Iran “to stop aiding the Russian military and its war against Ukraine,” while expressing concern “for transfers to Russia from companies around the world, including those in China, of dual-use materials and components for weapons and equipment for military production.”
Global tax on multinationals
On the other hand, the G7 Economy Ministers did not reach any conclusion on the application of the so-called global tax on multinationals and the Italian Economy Minister, Giancarlo Giorgetti, who chaired the summit, explained that “it is at a standstill.”
“It is undeniable that there are different points of view on how to approach this matter and possible retaliation. But we are almost at a stalemate, although we must nourish hope,” Giorgetti admitted at the final press conference of the meeting, which was held in the northern Italian town of Stresa, on the shores of Lake Maggiore.
The minister spoke of the reservations of China and India and admitted that “there is a risk of not meeting the June deadline” to apply the proposal promoted by the Organization for Economic Cooperation and Development (OECD) of a tax on 15% with respect to the gross income of international corporations on the activity they carry out in each country.
The final document mentions only congratulations “that an increasing number of countries have implemented or begun to implement the implementation of the Second Pillar (of the global tax) in their national legislation and we support the ongoing work to ensure consistent implementation ”.
Concern about China
Additionally, G7 finance ministers expressed concern about China’s overproduction and “non-market practices” and considered taking action, according to the final document released after the meeting.
“While we reaffirm our interest in balanced and reciprocal collaboration, we express our concern about China’s use of non-market policies and practices that undermine our workers, industries and economic resilience,” reads the document signed by the seven most industrialized democracies.
They conclude that they will “continue to monitor the potential negative impacts of overcapacity and consider taking measures to ensure a level playing field, in line with the principles of the World Trade Organization (WTO).”
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