Russia’s frozen assets: how to give to Ukraine
・The total amount of frozen assets in Russia in Europe and the US is $300 billion.
・Towards syndicated financing based on compensation claims
We provide a summary of articles published by Reuters.
Reuters report (2024.04.29)
Western aid funds for Ukraine will only last until the second half of 2025.
Using the seized assets of the Russian Central Bank ($300 billion), it will be able to secure funding until the end of 2028.
It is reported that ‘syndicated financing based on compensation claims is likely’.
Reuters points out:
1. Europe can secure stable funds to support Ukraine.
It can be supported until the second half of 2025 with Western support funds for Ukraine.
2. Meanwhile, US funding for Ukraine is unstable.
Even though Biden was re-elected, he had trouble getting Congressional approval for aid funding.
Funds needed for Ukraine:
Ukraine can enjoy sufficient support until the second half of 2025.
In 2023, the Allies allocated 88 billion euros to Ukraine.
1. Europe pledged 103 billion euros
2. The US has pledged 57 billion euros
In the future, the current ‘wars centered on territorial defense’ will not cost much.
Upcoming Ukrainian funding:
Western countries will use the seized Russian assets (=$300 billion).
It will be confiscated and moved to Ukraine.
1. Based on this capital, Western countries will lend to Ukraine.
2. The interest on this loan will be transferred to Ukraine.
President Biden’s thinking:
They hope to gain support from allies at the G7 meeting to be held in June this year.
3. The interest accumulated on Euroclear will be converted into loan receivables.
4. The plan is to use the proceeds from the sale to raise funds to support Ukraine.
If this were realized, it would be possible to raise around 40 billion euros.
Utilize $300 billion of frozen assets:
$300 billion would fund the war until the end of 2028.
Breakdown of frozen assets in Europe and America:
1. The amount of frozen assets in the United States is small.
President Biden has the power to confiscate frozen assets. However, the amount of frozen assets in the United States is only $5 billion.
2. The amount of frozen assets in Europe is large.
Most of the frozen assets are in Europe. However, there are legal issues with asset confiscation.
Realistic compensation loans in Europe:
Therefore, a realistic alternative would be a syndicated compensation loan.
1. Ukraine promises its allies that it will demand reparations from Russia.
2. Ukraine will receive a loan in return.
Significance of the US REPO Act:
A foreign aid package approved by the U.S. Congress and signed by the President.
The REPO law is a law that transfers Russian frozen assets to Ukraine.
US Republican stance:
1. The Republican Party is basically opposed to free aid to Ukraine.
2. However, it is in favor of the ‘diversion of frozen Russian assets.’
Russia condemns the seizure of frozen assets by the West!
We provide a summary of articles published in Kyodo News.
The West freezes Russian assets:
The total amount of frozen assets is 300 billion dollars (47 trillion yen).
This is the total amount of Russian assets (cash, bonds, etc.) that have been frozen by the West since the Putin war two years ago.
Stored at European financial institutions, etc.:
1. More than $200 billion (31 trillion yen) of that amount is held by European financial institutions.
2. Annual interest and dividends are 2 billion to 4 billion dollars (310 to 620 billion yen).
European Parliament uses frozen funds:
This interest and dividends do not violate international law.
The frozen funds will be used to rebuild Ukraine, which was destroyed by Russian invasion.
Utilized in Ukraine’s weapons procurement:
In the third year since the invasion of Russia began, the situation has changed dramatically.
Last month, the EC proposed using interest on Russian assets to buy weapons for Ukraine.
As the invasion of Russia drags on, the plan is to change the plan from using it for reconstruction support to one that can be used to procure weapons.
Europe and the US sell frozen assets:
This time, Russia invaded and destroyed Ukraine without going through international procedures.
Therefore, the sale of frozen Russian assets by the West does not require Russia’s consent.
Russia is responsible for reconstruction:
Ukrainian facilities were destroyed in a Russian attack. Therefore, Russia has the responsibility for reconstruction.
Russia’s international creditworthiness is zero:
Russia first broke the international order and destroyed Ukraine. Therefore, Russia already has zero international credibility.
https://news.yahoo.co.jp/articles/e378c6c6f0d9093ac957026e662265c47c34c418