by Daryna Krasnolutska, Jennifer Jacobs and Alberto Nardelli at Bloomberg
- Warning made to EU states, said people familiar with matter
- Move underscores Saudi Arabia’s growing diplomatic clout
Saudi Arabia privately hinted earlier this year it might sell some European debt holdings if the Group of Seven decided to seize almost $300 billion of Russia’s frozen assets, people familiar with the matter said.
The kingdom’s finance ministry told some G-7 counterparts of its opposition to the idea, which was meant to support Ukraine, with one person describing it as a veiled threat. The Saudis specifically mentioned debt issued by the French treasury, two of the people said.
In May and June, the G-7 was exploring different options regarding the Russian central bank’s funds. The group eventually agreed to tap the profits generated and leave the assets themselves alone despite a US and UK push for allies to consider bolder options, including a direct seizure. Some euro-member nations were against that idea, concerned it could undermine the currency.
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Saudi Arabia’s stance likely influenced the reluctance of those countries, said the people, who asked not to be identified to discuss private conversations.
The kingdom’s holdings of euro and French bonds may amount to tens of billions of euros,…