Yellen Urges 'More Ambitious' G7 Plans For Russian Assets

US Treasury Secretary Janet Yellen on Thursday urged G7 ministers meeting in Italy to work on "more ambitious options" to use frozen Russian assets to help Ukraine.

The ministers and central bankers from the Group of Seven world powers are meeting in Stresa, on the shores of northern Italy's Lake Maggiore, to prepare for a summit of G7 heads of state next month in Puglia.

Separately, she said they would also discuss what she considers to be "over-capacity" of key green technologies such as electric vehicles, batteries and solar panels.

Top of the agenda is a plan to finance crucial aid to Ukraine using the interest generated by the 300 billion euros ($325 billion) of Russian central bank assets frozen by the G7 and Europe.

The European Union earlier this month approved using the profits from the assets it froze to arm Ukraine, hoping to raise up to three billion euros ($3.3 billion) a year.

In a press conference ahead of the Stresa meeting, Yellen welcomed the plan but added that "we must also continue our collective work on more ambitious options, considering all relevant risks and acting together."

She said she wanted "concrete options" to present to G7 leaders meeting from June 13-15.

"Failure to take additional action is not an option -- not for Ukraine's future and not for the stability of our own economies and the security of our peoples," she said.

The United States has proposed granting Ukraine -- which has been fighting a Russian invasion for more than two years -- up to $50 billion in loans secured by interest on the assets.

But the details have not been finalised, including whether the debt would be issued by the US alone or G7 countries as a whole.

"We're looking for general agreement on the concept" in Stresa, with the details hammered out in the coming weeks, Yellen said.

She confirmed that "50 billion is a number that's been mentioned as a possible number that could be achieved by this. But there hasn't been a decision on an amount".

In addition to the United States and Italy, the G7 includes Britain, Canada, France, Germany and Japan.

Yellen had initially advocated a more radical solution -- the confiscation of the Russian assets themselves.

But European countries worried about creating a precedent in international law and the risk of serious legal disputes with Moscow.

A Treasury source in Italy, which as G7 president this year is hosting the Stresa talks, has said the US proposal is an "interesting way forward" but "any decision must have a solid legal basis".

Italian Economy Minister Giancarlo Giorgetti said Rome would be an "honest mediator" in discussions but said the task was "very delicate".

Experts warn that any further G7 action against Russia could lead to similar reprisals against European companies still operating in the country.

In April, Moscow sent a thinly veiled warning to Italy in its capacity as G7 chair, taking "temporary" control of the Russian subsidiary of the Italian heating equipment group Ariston in retaliation for what it called "hostile actions" by Washington and its allies.

John Kirton, director of the University of Toronto's G7 Research Group, said that tapping just the interest on Russian assets "would considerably reduce the legal problems".

"Legally, it would not be confiscating the 'assets'," he told AFP.

France on Wednesday welcomed the US plan, saying it was hoping the G7 finance ministers would reach a deal this week.

"The Americans have made proposals that fall within the framework of international law, and we are going to work on them openly and constructively," Economy Minister Bruno Le Maire said.

Yellen said the Stresa meeting would consider "additional action" against Moscow for its war in Ukraine, including to restrict its access to critical goods that support its military.

Meanwhile, the G7 ministers would also discuss concerns that Chinese government support for green technologies is leading to more production capacity than global markets can absorb, driving cheap exports and stifling growth elsewhere.

"Overcapacity threatens the viability of firms around the world, including in emerging markets," she said.

She added: "It's critical that we and the growing numbers of countries who have identified this as a concern present a clear and united front."