Finance ministers from the Group of 7 (G7) nations have pledged to continue providing economic support to Ukraine and support a plan to use proceeds from frozen Russian assets to aid in Ukraine’s reconstruction. These Russian assets were frozen by Western nations. The G7 finance officials also condemned recent attacks by Hamas on Israel and expressed solidarity with the Israeli people.
The agreement to explore using frozen Russian funds for Ukraine’s reconstruction comes after months of discussions among the world’s advanced economies, which have collectively frozen approximately $300 billion of Russian central bank assets. The plan is to use investment gains on these assets to support Ukraine, without directly using the underlying assets themselves.
The G7 finance ministers emphasized their support for Ukraine and their condemnation of Russia’s “illegal, unjustifiable, and unprovoked war of aggression against Ukraine.”
The annual meetings of the International Monetary Fund and the World Bank in Morocco have been overshadowed by geopolitical crises, including the attack on Israel, which had been expected to focus on continued measures to punish Russia for its actions in Ukraine. The G7 pledged to be more stringent in enforcing sanctions against Russia, particularly regarding efforts to evade and undermine these measures.
As part of this tougher stance, the United States imposed sanctions on two shipping companies for violating the oil price cap enacted by the G7 to limit Russia’s energy export revenue. These measures were put in place to prevent Russia from profiting from soaring energy prices, limiting its ability to sell oil using Western insurance and financing. The sanctions targeted Lumber Marine, a UAE shipping company, and Ice Pearl Navigation Corporation, a Turkish shipping company, for transporting Russian crude oil priced above specified levels after the cap was in effect.
This announcement is considered a new phase of enforcement of the oil price cap, which aims to reduce Russia’s resources for its war against Ukraine. However, it is a small step, given concerns about widespread evasion of the cap. Finance ministers and central bankers at the meeting are grappling with multiple crises that could affect global economic stability, including inflation and geopolitical risks.
By FCCT Editorial Team
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