Why is the G7 still hesitant to use frozen Russian assets to finance Ukraine?

Most G7 member governments have so far been hesitant to seize Russian assets for fear that some foreign investors with assets denominated in US dollars and euros will flee.

A building destroyed after being hit by artillery fire during the Russia-Ukraine conflict in the city of Kharkiv, March 8, 2022. Ukraine needs reconstruction.

Western nations are actively seeking to use seized Russian assets to finance Ukraine, amid political disputes in the US and Europe that threaten financial support for the conflict-ridden Eastern European country.

In recent weeks, officials from the Group of Seven (G7) industrialized nations have intensified discussions about a proposal to release a portion of Russia's frozen assets, worth approximately $300 billion. This would be a radical step, opening a new chapter in the West's financial war against Moscow.

This move comes as two major financial aid packages for Kyiv, totaling over $100 billion, stalled this week, as Republican members of the US Congress and Hungarian Prime Minister Viktor Orbán took a stand against funding for Ukraine.

Seizing Russian assets could provide an alternative source of funding for Kyiv, especially given the estimated cost of post-conflict reconstruction. However, most G7 governments have so far hesitated to take such a step, fearing that some foreign investors with assets denominated in US dollars and euros would flee.

Although the U.S. has never publicly supported the asset seizure proposal, in recent weeks Washington has quietly demonstrated a more assertive stance, arguing in G7 committees that there is already a path to asset seizure that is “consistent with international law.”

A U.S. official revealed that the issue could be discussed at a potential G7 leaders' summit, coinciding with the second anniversary of the Russia-Ukraine conflict.

Source: https://baoquocte.vn/vi-sao-g7-con-do-du-viec-dung-tai-san-bi-phong-toa-cua-nga-de-tai-tro-cho-ukraine-254055.html