Finance chiefs from the G7 industrial democracies yesterday began a two-day meeting in Italy seeking to present a common front on the need to provide a loan to Ukraine and oppose China’s “unfair” industrial policies.
However, comments from officials ahead of the gathering in Stresa, northern Italy, suggest no hard details would emerge on a US push for a loan to Ukraine backed by the future income from US$300 billion of frozen Russian assets.
“We will be putting a proposal to use the windfall profits for the Russian assets for the years to come,” French Minster of Finance Bruno Le Maire told reporters ahead of the opening session, a broad review of the global economy.
Photo: EPA-EFE
“So, 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,” Le Maire said.
The loan could amount to about US$50 billion, but no amounts have been agreed, US Secretary of the Treasury Janet Yellen has said.
Meanwhile, other G7 officials involved in the negotiations voiced caution, citing thorny legal and technical aspects to be hammered out.
The ministers would be joined today by Ukrainian Minister of Finance Serhiy Marchenko, whose country has been struggling to contain a Russian offensive in the north and the east for more than two years.
German Minister of Finance Christian Lindner said that there were still many questions on the loan proposal and he did not expect the G7 to reach any concrete decision in Stresa.
Combating China’s growing export strength would be another central theme of the meeting, after the US last week unveiled steep tariff hikes on Chinese imports, including electric vehicle batteries, computer chips and medical products.
Yellen on Thursday said that she wanted the US’ G7 partners — Japan, Germany, France, the UK, Italy and Canada — to show that they stood with Washington.
It is necessary to avoid a trade war with Beijing, which is an “economic partner,” but the G7 needs to protect its industrial interests, Le Maire said.
“A trade war is neither in the interest of the US, nor China, nor Europe, nor any country in the world,” he said. “Nevertheless, we have an issue with the unfair trade practices, with the high level of subsidies, and with [China’s] industrial overcapacities.”
It might only be a matter of time before the EU followed the US’ lead on tariffs, Italian Minister of Economy and Finance Giancarlo Giorgetti said. He is the chair of the Stresa gathering, as Rome holds the G7 presidency this year.
“The US has taken very tough decisions and Europe will probably have to consider whether to do the same,” he told Italian state television RAI yesterday.
Italy had been hoping to use the summit to revive blocked talks on a global minimum tax on multinationals, but Giorgetti said the deal would not be finalized by next month, as was previously planned.
He said the US, India and China have reservations over the terms of the deal, which was signed by about 140 countries in 2021, but has never been fully implemented.
The G7 would also address a proposed global wealth tax on billionaires, promoted by Brazil and France among the broader G20 developed countries.
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