With the suspension of US military aid in Ukraine, Donald Trump, the European nations are again looking at how to use a few $ 300 billion Russian state assets of some $ 300 billion frozen by a group of seven rich democrats after Moscow’s 2022 invasion of Ukraine.
What has been done here so far and some other ideas have been under consideration:
Action taken so far
A group of seven (G7) agreed to provide Ukraine with $ 50 billion through a series of bilateral loans last year, which can pay by using wind benefits from Kiev frozen Russian property.
The European Union estimates that 210 billion euros ($ 221.5 billion) of a frozen Russian property of about $ 300 billion are held in the European Union, mainly stored as a reserves by Russia’s central bank as a government bond.
In the Euroclair, Belgium, the securities repository where bulk of those bonds is held, provisions for 4 billion euros last year, which were worth earning interest to go to the Ukraine Fund specially created.
The initial installment of 1.55 billion euros for the first half of 2024 was paid in the fund last July. Another payment of about 2 billion euros covering the second half of 2024 is expected this month.
Those payments should flow for years.
The European Union has stated that the European Union has said that the interest earned to the property by 2027 will be a yield of about 15-20 billion euros ($ 16- $ 22 billion), although the euro zone’s interest rates will gradually reduce the amount, the Eurocillier said.
The United States committed to provide $ 20 billion of G7’s total support loan of $ 50 billion. But Trump’s move to suspend his country’s military assistance in Ukraine means that it is no longer clear whether the Washington will stick to the scheme or not.
G7 combines the United States, Canada, Japan, Germany, Britain, France and Italy groups.
Full confiscation?
British Foreign Minister David Lemi recently restored Britain’s long -standing position that Europe should only move beyond the cold to confiscate Russian property.
However, other European countries, including France and Germany, are more careful about the idea of confiscation.
The European Central Bank is also one of the suspects, fearing any step to confiscate Russian property, will assert confidence in the euro and hurt financial stability.
The ECB wants to ensure that it is not only the euro that is affected if other countries such as China or Saudi Arabia began to resume their reserves from the European courts, as they were possible as a precaution against them.
Ceasefire
Speaking with Trump last week, French President Emmanuel Macron said that the frozen Russian property could be part of the conversation with Russia to end the war.
According to a report by the Financial Times this week, the French authorities have discussed a proposal for European capitals that if Moscow violates the future ceasefire deal, seize the property.
Some top lawyers argue that, legally, there is a very little difference between leaving the interest earned from bonds and seizing an estimated $ 300 billion Russian assets.
They suggest that the latter option can be done under a principle of international law known as “Counteritors”. The property will then be sold or assigned to the collateral and Ukraine, or its dedicated reconstruction fund.
The previous examples of such a tour, such as Iraq’s 1990 Kuwait invasion of Iraqi property, and the World War Two after the German property, occurred after the end of those wars, not that they were still fierce – as with the Russian invasion of Ukraine.
Russian proposal
Sources told Reuters last month that Russia may agree to use $ 300 billion frozen funds for reconstruction in Ukraine, but insisting will say at least some spends in parts of the country that control Moscow forces.
Reuters could not establish whether the idea of using frozen funds was discussed when Russian and US authorities had their first face-to-face conversation in Riyadh last month to end the war in Ukraine.
Russian Central Bank Governor Elvira Nabilina said that there was no part of any dialogue when bank sanctions or raising Russia’s reserves.
Moscow has earlier stated that the West has been planned for robbery to use frozen funds for Ukraine and can retaliate by seizing Western property on its territory.
(Except for the headline, the story has not been edited by NDTV employees and is published by a syndicated feed.)
