EU Takes a Fresh Look at Confiscating Russia’s Frozen Assets For Use by Ukraine
EU Takes a Fresh Look at Confiscating Russia’s Frozen Assets For Use by Ukraine
The European Union is assessing the legal and financial implications of confiscating Russia’s sanctioned central bank assets for use by Ukraine, according to people familiar with the matter.
The bloc’s diplomatic service, as well as some member states, are examining whether judicial decisions would be needed as a legal basis to seize the frozen assets, or if a damage calculation would be enough, said the people, who asked for anonymity to discuss the sensitive issue.
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A decision to confiscate the money and hand it over to Ukraine would be a significant departure from the current approach. [...] Up to now, the EU and the Group of Seven nations have tapped the profits generated by some $300 billion in sanctioned Russian assets to provide aid to Ukraine. Under a G-7 plan, Kyiv’s allies approved a mechanism where the profits would be used to underpin a €50 billion ($52.5 billion) loan package for Kyiv.
[Confiscation of foreign assets, let alone of that size, would be unprecedented in history. While central bank reserves have been frozen many times -e.g., the United States are still holding the reserves of Iraq and Afghanistan, yet technically they remain the property of these countries. Central bank reserves of another country have never been confiscated before.]
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Some EU member states are currently evaluating what effect such a move would have on the euro as a currency, the people said. They’re also assessing the potential impact of third countries deciding to withdraw assets from countries that proceed with seizures.
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Kaja Kallas, the EU’s new foreign policy chief who runs its diplomatic service, said during her confirmation hearing last month that frozen assets should be tapped directly. “I will not use the word confiscation, because it’s really using the assets in a legal way,” she said.
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That would make investors outside of EU be way more vary in investing there, as this is pretty much theft. The move is ethically good for sure, but would it be worth it?
It depends. What do you think will be the impact on the EU economy if Russia invades Estonia in 10 years, triggering a nuclear war?
What would be the alternative? One consequence of the so-called 'multi-polar world' will be a limited flow of capital between different blocs, limited cross-border investments across multiple industries, which might lead to market fragmentation and a divergence of technical standards. We could see degrees of globalization we had back in the 1990s.
Countries like Russia don't seem to care about international law (or they care only if it is in their favor). This summer, some officials also discussed the seizure of China-owned infrastructure in Europe regarding Beijing's support for Russia in its war against Ukraine. Russia and its allies will remain a threat to democracy which is their only real enemy. Russia won't stop with Ukraine if they get what they want.
So, what's the alternative?
Nobody cares about "international law", it's a bully-vs-bully out there, "laws" are not laws when they can't get enforced. There are agreements, and disagreements, that change over time. Don't be mistaken, this or that country's "support" for this or that war, is just an excuse, a propaganda bite.
Touching China's assets, is too dangerous for as long as they're the main source of slave labor worldwide. As India's slave capabilities grow, things may change though... and India is being smart, buying arms from everyone, for the time being.
As for democracy, "representative democracy" is little more than a step away from a full dictatorship. Keep in mind that Russia is still "a democracy"... they just happen to pick the same guy over and over 🙄
There is not really an alternative, countries will force onto each other whatever they manage to get away with.
Putin will keep trying to "Make Russia Great Again", as in the Soviet era USSR "great", stopping at East Berlin at the very least... only that's another bunch of propaganda 😮💨
Russia needs to secure its inland waterway system, and its resource extraction areas. That includes control over the Sea of Azov. Any less, and the country might as well break up already, so they'll throw the whole country under the bus rather than surrender any of that.
Having a rule of law and consequences for breaking them makes investments safer. It’s part of why the USA and eu and even Russia spend so much money on bases internationally. To allow free trade and exert power. If Russia can invest in Europe for profit while taking from other countries with impunity, the rule of law is moot.