Will US & G7 Leaders Make Russia Fund Ukraine's $50 Billion Loan? | Vantage with Palki Sharma

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the G7 Summit kicks off tomorrow we told you about the agenda yesterday there's a host of issues that these leaders have to address but one thing stands out and that is tackling Russia the G7 is once again gearing up to take an aim at Russia specifically Russian money they want to use Russian assets to provide financial assistance to Ukraine Reports say the deal is done only some last minute details are being finalized and that the US is confident of making an announcement during the G7 Summit we will announce new steps to unlock the value of the immobilized Russian Sovereign assets to benefit Ukraine and to help them recover from the destruction that Mr Putin's Army has caused now this would be a significant move it would have wide ranging implications for the Global Financial system it could undermine the world's trust in the system it's like your neighbor going to a mall and buying products worth billions of dollars but they are not the ones paying the bills you are because your bank decided to charge your credit card for their shopping and that too without your consent that's what the West is doing here with Russian assets Moscow had assets worth $280 billion in Western financial institutions when the war in Ukraine began in 2022 Western governments froze these Russian assets they were pared in the west mostly in three countries Belgium France and Germany now this money is lying with the banks in the form of Securities and cash and the these assets have been frozen meaning Russia cannot access its own funds but the money is still lying in the bank and it's generating interest just like a fixed deposit in a bank would the West wants to give this Russian money to Ukraine and this would be done in the form of a loan that's what the Americans have proposed here's their plan the G7 will extend a $50 billion loan to Ukraine the repayments could be financed through the earnings of the Russian assets this is the interest generated by by Russian government assets lying in the west and this interest is significant every year these assets could generate more than 2 a half to35 billion doar in interest $3.7 billion According to some estimates this money could be diverted to repay the $50 billion loan European leaders are calling this a solidarity package for Ukraine we will meet again about this at the G7 Summit where we both hope all G7 members will we agree again to commit to a solidarity package to Ukraine of $50 billion now this plan has three benefits for the West First it ensures an uninterrupted flow of funds for Ukraine second Russia loses the profits its core investment stays intact but Moscow will lose the earnings from interest and third Russian assets will become bargaining chips for future negotiation with Moscow for potential peace talks now if this plan goes through what will Russia do get can Moscow stop the west from diverting its money and handing it over to Kev back in the month of March Russia had threatened to sue the West the Kremlin had said that if profits from its assets are diverted it will use and I'm quoting all possible judicial mechanisms to hit back at Europe we consider any attacks by the European Union or by anybody else against Russian assets as a legal and in violation of the fundamental princip of international law we are talking about another attempt to legitimize theft at state level but the EU is ready to push back so there could be a legal faceof although Vladimir Putin is going a step further now last month the Russian president signed a decree which gave the Russian State some new powers if they want they can now simply seize any Western asset in Russia this includes Properties Real Estate Securities even Western stakes and Russian companies they can take all of it and the Russian State can now step in and simply take over Moscow claims it has identified some assets already these assets are worth $290 billion currently they're owned by Western interests so if the G7 goes ahead with this plan Moscow is expected to respond in kind and this battle is expected to escalate but it's not just about Russia and the West this face off sends a troubling signal to the rest of the world too Financial assets of sovereign nations are being weaponized here this is already leading to unintended consequences central banks around the world are nervous today is Russia tomorrow it could be them their assets held by Western institutions could also be frozen in a similar fashion so this is a clear vulnerability they're increasing their gold reserves and they prefer to hold them at home now within their borders that's what banks are doing in 2020 50% of the world central banks held part of their gold reserves at home home by 2023 this number shot up to 68% and it's likely to go further up by 2028 74% of the central banks may move most of their gold reserves back home recently India's RBI The Reserve Bank of India also shifted around 100 tons of its gold back from the UK to India this was a rare move since 1991 the RBI did not think about executing such a transfer and how much gold does the RBI have in its Reserve Reports say around 822 tons of gold so part of it is outside India the other half stays in India so how did the RBI explain this move the central bank said it had the space to store the gold within the country so it decided to use that space there was no mention of the geopolitical tensions between Russia and the west but it goes without saying that these tensions are influencing the decisions of central banks around the world their faith in the international banking system is eroding the G7 May succeed in transferring Russian money to Ukraine but they would end up paying a huge price for it fan of Italy's famous Cuisine well we are serving it with a side of diplomacy as the G7 leaders gather in southern Italy Vantage is taking you to the heart of the action what's the agenda who is invited and how is Italy preparing for it catch the special edition of advantage throughout this week only on first post fan of Italy's famous Cuisine well we are serving it with a side of diplomacy as G7 leaders gather in southern Italy Vantage is taking you to the heart of the action what's the agenda who's invited and how is Italy preparing for it catch the special edition of Vantage throughout this week only on first post first post reports from the world's second largest continent hello I'm Allison lrange a very warm welcome from Durban South Africa we get you the news and the newsmakers from Africa from elections to climate change to Innovations and opportunities as the world's attention shifts we report from from Africa the heart of the global South join me every weekday live on first post [Music]
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Channel: Firstpost
Views: 101,315
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Keywords: firstpost, vantage, palki sharma, vantage palki sharma, firstpost palki sharma, first post, russia ukraine war, us on russian assets, us on frozen russian assets, russian assets frozen, russian assets for ukraine aid, russian assets to aid ukraine, russian assets to help ukraine, frozen russian assets, frozen russian assets to aid ukraine, frozen russian assets to help ukraine, russia war on ukraine, russia war on ukraine live, russia ukraine war update, russia ukraine war live
Id: SIJZJk-d2AA
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Length: 8min 5sec (485 seconds)
Published: Wed Jun 12 2024
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