U.S. Treasury Official to Meet with Italian Officials on Russia's Frozen Assets

Jay Shambaugh, the U.S. Treasury Department's Undersecretary for International Affairs, will visit Rome to discuss Russia's frozen assets and developing country debt issues. The visit comes ahead of the G7 summit, where leaders will debate monetizing these assets to support Ukraine. Shambaugh will also address food security priorities and speak at a Vatican-led event.

Reuters | Updated: 03-06-2024 20:56 IST | Created: 03-06-2024 20:56 IST
U.S. Treasury Official to Meet with Italian Officials on Russia's Frozen Assets

The U.S. Treasury Department's top international official will meet with Italian officials in Rome this week to discuss Russia's frozen assets ahead of the G7 leaders summit, and speak on developing country debt issues at a Vatican-led event, a Treasury spokesperson said on Monday. Undersecretary for International Affairs Jay Shambaugh will travel to Rome on June 3-6 for events focused on a range of issues, including high debt levels and food security, the spokesperson said.

The visit will occur a week before Group of Seven leaders are due to meet in southern Italy, where they hope to reach agreement on a plan to monetize some $300 billion in Russian assets frozen by Western powers after Moscow's 2022 invasion of Ukraine. The U.S. has been pushing its G7 partners - Japan, Germany, France, Britain, Italy and Canada - to embrace a loan backed by the income from the frozen assets that could provide Kyiv with as much as $50 billion in near-term funding. The loan has emerged as the top option after G7 countries failed to agree on seizing the assets outright.

U.S. Treasury Secretary Janet Yellen last month told reporters the plan has broad support but there is "quite a bit of work to be done" to make it a reality. The 27-member European Union also needs to endorse it, she said. The loan has emerged as the top option after G7 countries failed to agree on seizing the assets outright.

Shambaugh will have bilateral discussions with Italian finance ministry and central bank officials to discuss the Russian sovereign assets, cross-border payments, and additional G7 presidency priorities, the spokesperson said. On Tuesday, Shambaugh will speak with leaders of the World Food Programme, the International Fund for Agricultural Development (IFAD) and the Food and Agriculture Organization about U.S. priorities on food security. He will also take part in a livestreamed fireside chat hosted by IFAD.

On Friday, Shambaugh will address a symposium organized by the Vatican and Columbia University, deepening his call for more concerted efforts by major economies to support developing countries struggling with high debt burdens. Pope Francis is slated to address the symposium, a source familiar with the plans said.

Shambaugh in April warned emerging official creditors - the biggest of which is China - against free-riding on loans and grants to debt-laden developing countries by other countries and institutions while throttling back their own lending. He said there was a longstanding historical precedent among Western creditors to engage in refinancings or reprofilings for borrowers and not to pull out when the going got rough.

Shambaugh said decisive, coordinated action was needed by all official bilateral creditors to address the worsening financial challenges faced by low- and middle-income countries and to speed up debt relief when needed. Many developing countries faced "alarming tradeoffs" due to falling inflows of official bilateral and private funds at a time when debt service payments were also rising, he said.

The U.S. Treasury official's comments reflect growing frustration among Western countries and debtor nations about Beijing's foot-dragging on debt restructuring efforts and the slow pace of debt relief deals.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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