Saudi Arabia has hinted that it may sell European bonds if the G7 countries confiscate $280 billion in frozen assets of the Russian Central Bank.
This was reported by Bloomberg with reference to sources in diplomatic circles.
As early as the beginning of 2024, Saudi Arabia opposed the idea of confiscation, officials from the Kingdomʼs Ministry of Finance told their counterparts in the G7 countries. The Saudis have threatened to sell French bonds. According to the publication, Riyadh invested dozens of billions of euros in these bonds. French officials began to fear that other countries might follow the example of the Saudis.
The sovereign assets of the countries are considered inviolable, therefore a number of EU states feared at the beginning of the discussions that confiscation of the assets of the Central Bank could lead to negative consequences for the European economy, in particular, it would provoke the withdrawal of assets of third countries.
A source among European officials described the Saudi pressure as a "veiled threat". Riyadh stated that there were no threats and that relations with the G7 are based on mutual respect. One of the officials of Saudi Arabia assures that such threats are not in the style of the government, but perhaps in this way the possible consequences for the sale of frozen assets were outlined.
The position of the Saudis changed after the G7 countries came up with a proposal that does not involve the forced deprivation of the Russian Federationʼs finances, one of the sources said.
- At a summit in Italy in June 2024, after months of discussions, G7 leaders agreed on a financial structure that will provide Ukraine with about $50 billion in aid at the expense of Russian frozen assets. Seven member states and the European Union have agreed to provide loans that will be repaid by the proceeds of about $280 billion in frozen Russian funds, most of which are located in Europe. Profits from blocked Russian funds are expected to generate between €3 and €5 billion annually. The United States and Great Britain were in favor of complete confiscation. Japan and Germany are against this.
- The decision not to confiscate Russian assets, but to transfer the profits to the Ukraine Aid Fund, was made in particular because of the position of Saudi Arabia, informed sources told Bloomberg, who wished to remain anonymous.