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, Report informs via Bloomberg.
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.
Saudi Arabia’s stance likely influenced the reluctance of those countries, said the people, who asked not to be identified to discuss private conversations.
“No such threats were made,” according to a statement sent from the Saudi finance ministry. “Our relation with the G-7 and others is of mutual respect and we continue to discuss all issues that promote global growth and enhance the resilience of the international financial system.”
The kingdom’s holdings of euro and French bonds may amount to tens of billions of euros, but probably aren’t big enough to make a major difference if sold off. European officials were still concerned because other countries might have followed Saudi Arabia’s lead.
One Saudi official said it wasn’t the government’s style to make such threats but that it possibly outlined to G-7 members the eventual consequences of any seizures.
The Saudi position changed after G-7 nations went with a proposal that didn’t expropriate the assets, one of the people said.
It was unclear, said the people, if Saudi Arabia acted out of self-interest — fearing a seizure would set a precedent that could be used against other countries in future — or in solidarity with Russia. Riyadh and Moscow have maintained close relations since Russia invaded Ukraine and together lead the OPEC+ cartel of oil producers. The Saudi government has also built ties with Ukraine, and President Volodymyr Zelenskyy traveled to the kingdom last month to meet Crown Prince Mohammed bin Salman.