Europe, where most of Russia’s assets are located, fears possible consequences for financial stability, as well as retaliatory actions from Russia.
In the West, talk of confiscating frozen Russian assets in favor of Ukraine has intensified. They are worth about 300 billion dollars. The administration of US President Joe Biden has stepped up confiscation efforts, thus trying to compensate for the inability to allocate additional funds to Congress, writes The New York Times. What could come of it?
The US insists
Although the United States has previously categorically opposed the confiscation of sovereign assets by the Central Bank of the Russian Federation, the White House has now begun to actively discuss within the G7 whether it can use its existing powers to use these funds or must turn to Congress.
According to NYT interlocutors, the United States is pressuring the UK, France, Germany, Italy, Canada and Japan so that the strategy for using sovereign assets is ready by February 24, 2024, the second anniversary of the full-scale Russian Federation. invasion of Ukraine.
Biden himself has not yet definitively supported this option, the newspaper said.
The New York Times’ sources point to several issues that the G7 still needs to resolve. Among other things, we are talking about whether the confiscated assets will be sent directly to Ukraine or used in its favor in some other way.
Another problematic issue is whether these funds will be used only for the reconstruction of Ukraine and its budget support, or directly for the military effort. Moreover, because confiscation of sovereign assets on this scale is unprecedented, Moscow could retaliate—including lawsuits and confiscation of glass.
According to the NYT, related discussions became more urgent after the US Congress failed to approve additional funding for Ukraine until the end of this year. And even if the funds were eventually approved, the White House needed an alternative source of funds for Kyiv to prevent such situations from occurring.
unot a lever of influence in the Russian Federation
In the past, American officials considered the confiscation scenario as a lever of influence on the Russian Federation to force it to sit at the negotiating table with Ukraine and stop the conflict. But Moscow has not shown it is interested in such negotiations. In 2023, the US privately circulated a G7 discussion paper suggesting that seizing Moscow’s fixed assets would be legalized as a “countermeasure to persuade Russia to stop its aggression.”
The United States, with the support of Britain, Japan and Canada, has offered to continue preparatory work so that options are ready for a potential meeting of G7 leaders around February 24 – two years after the invasion of Russia, the Financial Times said.
Three working groups proposed by Washington will study legal issues related to confiscation; procedures for implementing such policies and mitigating risks; and options for how best to direct support to Ukraine.
Germany, France, Italy and the EU have expressed some caution, as well as the need to carefully assess the legality of the seizure of Moscow’s assets before making a decision. Some European ministers also noted the need to maintain a high level of secrecy about this work.
EU position
The EU has not yet resorted to seizing Russian assets themselves, but is examining ways to seize the income generated by financial institutions such as Euroclear, which holds €191 billion in sovereign assets.
Europe, where most of the assets are located, is more cautious, fearing possible consequences for financial stability, as well as retaliatory actions from Russia.
Italy, which takes over the G7 presidency in 2024, is among those concerned about potential retaliation for its companies operating in Russia, something Moscow has already threatened. Russia has also warned that it will cut diplomatic ties with the US in response to any asset confiscation.
The EU, UK and France also emphasized that this money is not readily available and will not be sufficient to meet Ukraine’s reconstruction needs, and that the seizure of assets should not come at a cost. of providing financial support to Kyiv in 2024.
Over the past two years, the G7 has been able to overcome differences among its members several times on economic measures against Russia, including an initial broad package of sanctions, as well as setting a price ceiling. in Russian oil.
Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.