Biden Wants G7 To Give Russian Central Bank Funds To Ukraine, But France Resists

President Biden wants the G7 countries to develop a plan to eventually have Russia’s frozen sovereign assets handed over Ukraine in order to support the war effort, Bloomberg has reported. Bloomberg’s source have also said the US president has privately warned allies that Ukraine’s collapse, and a Russian victory, would signify the international order is effectively destroyed for at least the next half-century.

“G-7 officials have been discussing options to use the $280 billion of immobilized Russian Central Bank assets, including using the money as collateral to raise debt or issuing guarantees against the frozen funds, said the people, who spoke on the condition of anonymity,” according to the report. Biden reportedly wants a firm plan proposed by the time of the Italy G7 summit in June. The US has been working behind the scenes to build consensus.

The UK and Canada are reportedly on board, but not Germany and France. Earlier this week France firmly voiced its rejection of seizing the frozen Russian bank funds.

“We don’t think this legal basis is sufficient,” French Finance Minister Bruno Le Maire said after the G7 finance ministers meeting in Brazil on Wednesday.

“This legal basis must be accepted not only by the European countries, not only by the G7 countries, but by all the member states of the world community, and I mean by all the member states of the G20. We should not add any kind of division among the G20 countries.”

Opponents, including of course Russian officials themselves, have highlighted that such a act would be outright and brazen theft.

Russian Finance Minister Anton Siluanov has warned in response, “We have ways to respond. We have also frozen sufficient volumes of financial assets and investments of foreign investors in our securities, all of which transfers we carry out for the owners of our securities.”

Europe has to agree to any US push to freeze banks funds, since the bulk of Russia’s money – about $200 billion – is being held by European banks. In such a scenario Moscow may consider the ‘theft’ to be tantamount to an act of war.

Still, Treasury Secretary Janet Yellen was undeterred when she was in Brazil this week. “It is necessary and urgent for our coalition to find a way to unlock the value of these immobilized assets to support Ukraine’s continued resistance and long-term reconstruction,” she had said from Sao Paulo, speaking to 20 finance ministers and central bank governors.

“I believe there is a strong international law, economic, and moral case for moving forward. This would be a decisive response to Russia’s unprecedented threat to global stability,” she added.