In an attempt to put aside their intense geopolitical differences, G20 finance ministers discussed the difficulties facing the global economy on Wednesday, and Western nations sparred about how to handle frozen Russian assets.

In order to address concerns like poverty and climate change, Brazilian organisers of the two-day conference in Sao Paulo proposed a common statement that omits any reference of the battles in Gaza and Ukraine.

However, the geopolitical concerns that had been clouding the event quickly came to light, with even close friends at odds over what to do about Russian assets that the West had blacklisted.

These cracks were apparent on Wednesday morning when ministers from the Group of Seven major democracies convened ahead of the G20 meeting to discuss whether the frozen assets might be used to fund Ukraine’s reconstruction.

On Tuesday, U.S. Treasury Secretary Janet Yellen stated that she thought there was a solid legal foundation in place under international law to extract value from Russian assets through seizure or collateral.

However, French Finance Minister Bruno Le Maire contended on Wednesday that there is insufficient justification in international law to confiscate the Russian assets, stressing that the support of other nations and G20 members would be necessary for such a measure.

“We should not add any kind of division among the G20 countries,” he told reporters. “If the legal basis is not sufficient … you will create more divisions at a time when we need more unity to support Ukraine.”

Their disagreement highlighted the complex geopolitical landscape facing the G20 group of major global economies, whose foreign ministers expressed significant disagreements over the conflict in Ukraine and Israel’s shelling of Gaza last week in Rio de Janeiro.

Tatiana Rosito, Brazil’s coordinator of the G20 finance track in Sao Paulo, reported that deputy ministers successfully completed talks for the economic section of the group’s communiqué in a “very positive” tone.

When Reuters saw a copy of the declaration on Tuesday, it mentioned regional problems only very briefly.

However, German Finance Minister Christian Lindner stated that his nation will only sign the G20 declaration if it includes a reference to geopolitical matters like the conflict in Ukraine.

Masato Kanda, Japan’s assistant finance minister for international affairs, stated that work on the G20 communique was still ongoing following the conclusion of the first day’s meeting.

“There are many areas that still need discussion, including those outside of geo-political issues. It’s hard to predict how everything will play out,” Kanda told reporters.

With its G20 presidency, Brazil is attempting to give poor countries in the Global South greater clout and steer the conversation away from geopolitical disputes between superpowers and towards a consensus on sustainable development.

The global minimum wealth tax is a potential new foundation for international tax cooperation, as suggested by Brazilian Finance Minister Fernando Haddad in his opening remarks to the meeting of finance ministers and central bank governors.

Haddad had previously proposed that the G20 address inheritance taxes that benefit the extremely wealthy and tax havens for the wealthiest.

One of Brazil’s top goals during its G20 presidency is to tackle inequality, and governor of the central bank of Brazil, Roberto Campos Neto, described the fight against inflation as an essential tool for doing so.

Despite noting that there has been some disinflation since the outbreak, Campos Neto urged perseverance.

“There is still work to be done in the last mile, and risks remain ahead,” he said.

(Adapted from Reuters.com)

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