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G7 finance chiefs back plan to leverage frozen Russian assets to fund Ukraine

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G7 finance chiefs back plan to leverage frozen Russian assets to fund Ukraine

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G7 finance ministers have backed the idea of issuing a loan to Ukraine, secured by profits on frozen Russian assets, in an effort to secure financing for Kyiv beyond 2024.

Ministers’ discussions were based on a US proposal that circulated ahead of the gathering in Stresa, Italy, to issue a loan of about $50bn to be repaid with profits from around €190bn Russian central bank assets. The Russian assets are stuck in Belgian central securities depository Euroclear.

On Saturday, ministers said they were “making progress” on options to “bring forward” the profits, according to a draft communique seen by the Financial Times. They added that G7 leaders would be presented with options for how to construct the loan ahead of a summit in June.

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The finance chiefs also vowed to continue to press China to cut industrial subsidies that they said put western rivals out of business, and said implementing the most significant global tax deal for more than a century was “a top priority”. They also raised concerns over Israel’s plans to block Palestinian banks’ access to Israeli lenders — a measure the US and allies believe could destroy the West Bank’s economy.

The G7 — a grouping of advanced economies that includes all of Ukraine’s big western allies — wants to future-proof funding for Kyiv beyond this year, when critical elections take place on both sides of the Atlantic.

Since Russia’s invasion, Ukraine has relied heavily on western aid for military support and to fund crucial public services.

Ukraine’s finance minister Serhiy Marchenko, who attended the G7 meeting, estimated Ukraine’s budget gap in 2025 to be at “more than $10bn” for social and humanitarian needs, adding that “that gap would be much broader” if military needs were included.

He welcomed progress on a loan backed by profits, but said that for Ukraine this was only a “temporary solution for right now, but the general solution should be confiscation” of the Russian assets themselves.

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Janet Yellen, US Treasury secretary, said on Saturday that she did not “want to declare victory here prematurely”, but it was “generally viewed as promising”.

“We will put in a lot of work over the next several weeks,” she said, adding that the proposal had to be “fleshed out” before leaders could consider it.

Yellen said that officials would not be swayed by Russian President Vladimir Putin’s threat to confiscate US citizens’ assets in response. “We’re all very supportive of Ukraine, we’re not going to be deterred.”

Many details of the loan are yet to be agreed, including the amount, who would issue it and how it would be guaranteed if Ukraine defaulted on its debt or if the profits fail to materialise, according to people familiar with the discussions.

Europeans are particularly concerned with “fair-risk sharing”, an official said, fearing Europe would bear the brunt of the financial and legal risks and retaliatory action by Russia because the majority of the assets are held on the continent.

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“The proposal will clearly be a G7-branded proposal and that is why burden-sharing needs to be balanced,” Giancarlo Giorgetti, Italy’s finance minister who chaired the talks, said on Saturday.

The US has also pushed the rest of the G7 to beef up their rhetoric on trade tensions with Beijing.

China’s manufacturing subsidies undermined “our workers, industries, and economic resilience”, the draft communique said, adding that the grouping would “continue to monitor the potential negative impacts of overcapacity and will consider taking steps to ensure a level playing field”.

However, there is discord on what those next steps might be.

While the Biden Administration has already quadrupled tariffs on Chinese electric vehicles, and introduced sharper levies on other clean tech imports to protect green manufacturing jobs in the US, the European Commission has favoured investigations into Chinese subsidies for solar panels, railways and electric vehicles. Beijing retaliated against both US and European imports of chemicals.

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EU members, which are more reliant on export trade with Beijing, signalled greater reluctance to impose levies for fear of escalating a trade war.

While ministers said turning the global two-tiered tax deal agreed in 2021 by more than 135 countries into a reality was a “top priority”, an end-of-June deadline to sign a treaty underpinning one part was unlikely to be met.

Ministers, including Yellen, said opposition from India was delaying progress on the so-called Pillar One, which reallocates part of countries’ right to tax multinational companies to the places where they make sales.

“We are unfortunately at an almost dead point” on Pillar One, Giorgetti said, adding the deadline “risks being missed”.

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Supreme Court blocks redrawing of New York congressional map, dealing a win for GOP

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Supreme Court blocks redrawing of New York congressional map, dealing a win for GOP

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The Supreme Court on Monday intervened in New York’s redistricting process, blocking a lower court decision that would likely have flipped a Republican congressional district into a Democratic district.    
  
At issue is the midterm redrawing of New York’s 11th congressional district, including Staten Island and a small part of Brooklyn. The district is currently held by a Republican, but on Jan. 21, a state Supreme Court judge ruled that the current district dilutes the power of Black and Latino voters in violation of the state constitution.  
  
GOP Rep. Nicole Malliotakis, who represents the district, and the Republican co-chair of the state Board of Elections promptly appealed to the U.S. Supreme Court, asking the justices to block the redrawing as an unconstitutional “racial gerrymander.” New York’s congressional election cycle was set to officially begin Feb. 24, the opening day for candidates to seek placement on the ballot.  
  
As in this year’s prior mid-decade redistricting fights — in Texas and California — the Trump administration backed the Republicans.   
 
Voters and the State of New York contended it’s too soon for the Supreme Court to wade into this dispute. New York’s highest state court has not issued a final judgment, so the voters asserted that if the Supreme Court grants relief now “future stay applicants will see little purpose in waiting for state court rulings before coming to this Court” and “be rewarded for such gamesmanship.” The state argues this is an issue for “New York courts, not federal courts” to resolve, and there is sufficient time for the dispute to be resolved on the merits. 
  
The court majority explained the decision to intervene in 101 words, which the three dissenting liberal justices  summarized as “Rules for thee, but not for me.” 
 
The unsigned majority order does not explain the Court’s rationale. It says only how long the stay will last, until the case moves through the New York State appeals courts. If, however, the losing party petitions and the court agrees to hear the challenge, the stay extends until the final opinion is announced. 
 
Dissenting from the decision were Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson. Writing for the three, Sotomayor  said that  if nonfinal decisions of a state trial court can be brought to highest court, “then every decision from any court is now fair game.” More immediately, she noted, “By granting these applications, the Court thrusts itself into the middle of every election-law dispute around the country, even as many States redraw their congressional maps ahead of the 2026 election.” 

Monday’s Supreme Court action deviates from the court’s hands-off pattern in these mid-term redistricting fights this year. In two previous cases — from Texas and California — the court refused to intervene, allowing newly drawn maps to stay in effect.  
  
Requests for Supreme Court intervention on redistricting issues has been a recurring theme this term, a trend that is likely to grow.  Earlier last month  the high court allowed California to use a voter-approved, Democratic-friendly map.  California’s redistricting came in response to a GOP-friendly redistricting plan in Texas that the Supreme Court also permitted to move forward. These redistricting efforts are expected to offset one another.     
   
But the high court itself has yet to rule on a challenge to Louisiana’s voting map, which was drawn by the state legislature after the decennial census in order to create a second majority-Black district.  Since the drawing of that second majority-black district, the state has backed away from that map, hoping to return to a plan that provides for only one majority-minority district.    
     
The Supreme Court’s consideration of the Louisiana case has stretched across two terms. The justices failed to resolve the case last term and chose to order a second round of arguments this term adding a new question: Does the state’s intentional creation of a second majority-minority district violate the constitution’s Fourteenth and Fifteenth Amendments’ guarantee of the right to vote and the authority of Congress to enforce that mandate?    
Following the addition of the new question, the state of Louisiana flipped positions to oppose the map it had just drawn and defended in court. Whether the Supreme Court follows suit remains to be seen. But the tone of the October argument suggested that the court’s conservative supermajority is likely to continue undercutting the 1965 Voting Rights Act.   

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Map: Earthquake Shakes Central California

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Map: Earthquake Shakes Central California

Note: Map shows the area with a shake intensity of 3 or greater, which U.S.G.S. defines as “weak,” though the earthquake may be felt outside the areas shown.  All times on the map are Pacific time. The New York Times

A minor earthquake with a preliminary magnitude of 3.5 struck in Central California on Monday, according to the United States Geological Survey.

The temblor happened at 7:17 a.m. Pacific time about 6 miles northwest of Pinnacles, Calif., data from the agency shows.

As seismologists review available data, they may revise the earthquake’s reported magnitude. Additional information collected about the earthquake may also prompt U.S.G.S. scientists to update the shake-severity map.

Source: United States Geological Survey | Notes: Shaking categories are based on the Modified Mercalli Intensity scale. When aftershock data is available, the corresponding maps and charts include earthquakes within 100 miles and seven days of the initial quake. All times above are Pacific time. Shake data is as of Monday, March 2 at 10:20 a.m. Eastern. Aftershocks data is as of Monday, March 2 at 11:18 a.m. Eastern.

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US says Kuwait accidentally shot down 3 American jets

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US says Kuwait accidentally shot down 3 American jets

The U.S. and Israel have been conducting strikes against targets in Iran since Saturday morning, with the aim of toppling Tehran’s clerical regime. Iran has fired back, with retaliatory assaults featuring missiles and drones targeting several Gulf countries and American bases in the Middle East.

“All six aircrew ejected safely, have been safely recovered, and are in stable condition. Kuwait has acknowledged this incident, and we are grateful for the efforts of the Kuwaiti defense forces and their support in this ongoing operation,” Central Command said.

“The cause of the incident is under investigation. Additional information will be released as it becomes available,” it added.

In a separate statement later Monday, Central Command said that American forces had been killed during combat since the strikes began.

“As of 7:30 am ET, March 2, four U.S. service members have been killed in action. The fourth service member, who was seriously wounded during Iran’s initial attacks, eventually succumbed to their injuries,” it said.

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Major combat operations continue and our response effort is ongoing. The identities of the fallen are being withheld until 24 hours after next of kin notification,” Central Command added.

This story has been updated.

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