G7 Summit Opens With Deal To Use Russian Assets For Ukraine As EU’s Traditional Powers Recalibrate

A Group of Seven summit is opening Thursday with agreement on a US proposal to back a USD 50 billion loan to Ukraine using frozen Russian assets as collateral, giving Kyiv a strong show of support even as Europe’s political chessboard shifts to the right.

Diplomats confirmed that an agreement had been reached on the deal before the leaders even landed in southern Italy for the three-day summit. Ukrainian President Volodymyr Zelenskyy will be on hand and is expected to sign a separate bilateral security agreement with US President Joe Biden.

Beyond the Ukraine war, Pope Francis will become the first pope to address a G7 summit, adding a dash of celebrity and moral authority to the annual gathering that is being held this year in Italy’s sun-drenched Puglia region. He’ll be speaking Friday about the promises and perils of artificial intelligence, but is expected to also renew his appeal for a peaceful end to wars in Ukraine and Gaza.

The G7 includes Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. Host Italy has invited several African leaders – Algerian President Abdelmadjid Tebboune, Kenyan President William Ruto and Tunisian President Kais Saied – to press Italy’s Africa initiatives. Other guests include Brazilian President Luiz Inácio Lula da Silva, Indian Prime Minister Narendra Modi, fresh off his own election, and Turkish President Recep Tayyip Erdogan.

With Biden, British Prime Minister Rishi Sunak and now French President Emmanuel Macron facing elections in the coming months, pressure was on the G7 to get done what it can while the status quo lasts.

Frozen Russian assets to support Ukraine

The US proposal involves using profits from the roughly USD 260 billion in frozen Russian central bank assets, most of them held in the European Union, to help Ukraine, and issuing a USD 50 billion loan from the U.S. government to Kyiv, using windfall profits from the immobilized funds as collateral.

A French official, briefing reporters Wednesday, said a political decision by the leaders had been reached but that technical and legal details of the mechanism to tap into the assets still had to be worked out. The issue is complicated because if the Russian assets one day are unfrozen – say if the war ends – then the windfall profits will no longer be able to be used to pay off the loan, requiring a burden-sharing arrangement with other countries.

On the eve of the summit, Washington also sent strong signals of support for Ukraine, with widened sanctions against Russia to target Chinese companies that are helping its war machine.

Europe’s new political chessboard

Italian Premier Giorgia Meloni goes into the meeting fortified at home and abroad after her far-right party had an even stronger showing in weekend European Parliament elections than the 2022 elections that made her Italy’s first female premier. Known for its revolving-door governments, Italy is now in the unusual position of being the most stable power in the EU.

The leaders of the G7’s two other EU members, Germany and France, didn’t fare nearly as well, rattled after hard-right parties made strong showings in the vote. Macron called a snap election and German Chancellor Olaf Scholz saw the far-right Alternative for Germany beat out his Social Democrats.

As a result, Meloni is likely to be able to steer the three-day meeting to her key priority items as she further cements her role on the world stage, analysts said. One reported sign of her flexed far-right muscles: Meloni’s office denied media reports that Italy was trying to water down language about access to abortion in the final communique.

“While it’s unlikely the recent results will radically shift the focus of the upcoming G7 Summit, this electoral win offers Premier Meloni additional leverage to frame this as an essentially Mediterranean Summit,” said Nick O’Connell, deputy director of the Atlantic Council.

That includes pushing her migration agenda as Meloni seeks to leverage her program for a non-exploitative relationship with Africa to boost development while curbing illegal migration to Europe.

Italy, which for decades has been ground zero in Europe’s migration debate, has been promoting its Mattei Plan as a way to create jobs and opportunity in Africa and discourage its young people from making dangerous trips across the Mediterranean Sea. The plan involves pilot projects in areas such as education, health care, water, sanitation, agriculture and energy infrastructure.

The pope and artificial intelligence

Pope Francis has called for an international treaty to ensure AI is developed and used ethically, acknowledging the promise it offers but emphasizing the grave and existential threats it poses.

He’ll bring that campaign to the world’s industrialized countries as wars are raging across multiple fronts. One of his greatest concerns has been on the use of AI in the armaments sector, which has been a frequent focus of the Jesuit pope who has called even traditional weapons makers “merchants of death.”

But Francis is also concerned about what AI means for the poorest and weakest: technology that could determine the reliability of an applicant for a mortgage, the right of a migrant to receive political asylum or the chance of reoffending by someone previously convicted of a crime.

The 87-year-old pope has said he would also repeat his calls for peace while holding a half-dozen bilateral meetings on the sidelines of the summit.

It’s happening where?

The G7 summit is taking place in a sprawling luxury resort that’s something of a theater set, a faux town made to resemble one of Puglia’s medieval white-washed hamlets but that actually only dates from 2010.

Located next to an actual archaeological park, Borgo Egnazia features narrow streets, villas, restaurants and a town square complete with a clocktower. A favourite of celebrities, it will be sealed off to outsiders for the duration of the summit.

No such five-star accommodations await the 2,000-plus police and carabinieri forces who have been brought in to provide security. Authorities on Wednesday sequestered the decommissioned cruise ship that had been housing them in Brindisi’s port, after the police union complained about unacceptable hygienic conditions on board.

As with any G7, an assortment of anti-global, anti-war and climate activists are staging protests around the summit venue, but far from where the leaders are meeting. One group is staging a “dinner for the poor” on Friday night calling for “peace, the rights of peoples and against the Big 7 who claim to decide the destiny of the world and our planet.”