G7 Grapples for Deal on Using Russian Assets for Ukraine

G7 leaders still hope to reach a deal on using profits from Russian assets for Ukraine at next week's summit in Italy but there is no consensus yet, diplomatic sources said Friday.

US President Joe Biden and the leaders of the other Group of Seven rich democracies – France, Italy, Germany, Japan, Canada and Britain – are gathering at the June 13-15 summit in Puglia.

Ukrainian President Volodymyr Zelensky will attend to press for more help from Western allies, before heading to a peace summit in Switzerland.

G7 leaders are hoping to agree a deal on using the profits from Russian assets frozen by Western countries to provide Ukraine with budget support and help to rebuild the country.

Their finance ministers last month reported “progress” towards reaching an agreement, but Italian sources warned Friday it remained a complex, technical discussion.

A diplomatic source from another G7 nation expressed optimism at reaching a deal next week, but said there was no consensus yet.

The United States has pushed the G7 to grant Ukraine up to $50 billion in loans secured by interest on the 300 billion euros ($325 billion) of Russian central bank assets frozen by the EU and G7 nations.

But there remain many questions including who would issue the debt and what would happen if the assets were unfrozen in the advent of a peace deal.

A German government source said Berlin is optimistic of a deal in Puglia, but noted that any agreement would have to be approved by the member states of the EU, where the bulk of the frozen assets are held. 

The G7 leaders are also expected to discuss their concerns over China's support for Russia's military expansion, and what they say is increasing cooperation between Moscow and North Korea.

Elsewhere, the eight-month-old Hamas-Israel conflict will feature as part of a wider discussion on the Middle East, the Italian sources said.

Saudi Crown Prince Mohammed bin Salman, Turkish President Recep Tayyip Erdogan and United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan plan to be at the summit in Puglia.

Indian Prime Minister Narendra Modi, who formally secured his third term in office on Friday after an unexpectedly close election, is also due to attend, as is Brazilian President Luiz Inacio Lula da Silva whose country holds the rotating G20 presidency this year.

On Friday, Pope Francis will fly in to address a session on artificial intelligence, a subject on which he has called for more regulation.

Improving relations with Africa is also on the agenda, with leaders from Kenya, Algeria and the African Union among those expected in Puglia.

Global trade and economic security, including US-led concerns about China's industrial overcapacity will also feature in the talks.