At the G7 summit held in Stresa, Italy, from May 23 to 25, 2024, there was a heated debate over the plan to unfreeze Russian assets related to the Russian invasion of Ukraine. G7 members sought ways to utilize the frozen Russian assets for the reconstruction of Ukraine, but they could not reach an agreement on the specific implementation methods.

The European Union (EU) came up with its own independent plan just before the meeting. With frozen Russian assets within the EU member states accounting for two-thirds of the total frozen assets, the EU decided to utilize only the investment income instead of the frozen assets themselves. This is expected to generate around 3 billion euros (about 500 billion won) in annual revenue.

However, it is estimated that it will take $486 billion (approximately 62 trillion won) over the next 10 years to rebuild Ukraine from the damage caused by the Russian invasion, and the investment income from frozen assets is far from enough.

In response, the United States proposed issuing bonds or borrowing using the future interest on the frozen assets as collateral. Since the total amount of Russian assets frozen by the West amounts to $300 billion (approximately 380 trillion won), this method could potentially increase Ukraine's support funds to $50 billion.

However, implementing this plan would require freezing Russian assets for a considerable period, which raises concerns about potential violations of international law in terms of securing ownership. It could also negatively impact international capital flows due to the depletion of foreign reserves in some countries.

The G7 joint statement welcomed the EU's decision and agreed to continue discussions to be able to present a range of options for supporting Ukraine at the G7 summit scheduled for June. Ultimately, the EU proposal is expected to serve as the basis or a compromise between the EU and the US plan will be reached. In any case, Japan's role in this discussion is expected to be minimal as the amount of Russian assets frozen by Japan is not significant.

Meanwhile, Russia faced severe economic sanctions when it invaded Ukraine, leading to strong asset freezing measures. According to the Japanese government, approximately 3.8 trillion won worth of yen assets held by the Central Bank of Russia in Japan have been frozen.

The frozen assets are restricted from being freely disposed of by the Central Bank of Russia, preventing them from being invested or withdrawn from the market. This is an economic sanction by the international community aimed at preventing Russia from raising funds for the invasion of Ukraine.

As the value of the Russian ruble plummeted due to sanctions, the Central Bank of Russia took steps to defend the ruble, including a significant increase in the key interest rate from 9.5% to 20%. It has also implemented strong measures, such as mandating export companies to sell foreign currency, but experts believe the impact of the sanctions is significant.

With the Russian economy suffering severe repercussions from economic sanctions, international support for Ukraine's reconstruction is expected to continue. Ukraine's reconstruction is not just about rebuilding destroyed buildings and infrastructure, but also about long-term investments for the future, such as green energy transition, digital innovation, and inclusive economic development.

While sufficient support measures for Ukraine's reconstruction were not established at the G7 summit, it is hoped that the international community will continue to seek solutions and work together. This will serve as a firm foundation for ending Russia's abnormal invasion and creating a peaceful world.