What about Russian assets? "Kreml hopes"

Just after the start Russia's full-scale invasion of Ukraine in 2022 The G7 countries decided to frost ca. EUR 260 billion ($280 billion) the Central Bank of Russia reserves, collected in western currencies and securities. EUR 210 billion of these funds are deposited in Europe, mostly in the Belgian financial institution Euroclear. The remainder are in the United States, France, Switzerland, large Britain, Canada and Japan.

For many months there has been a discussion about possible options usage of frozen Russian assets. Moscow considers this solution illegal and announces the consequences if Western countries take this step.

War in Ukraine. Dispute over frozen Russian assets

As he notes Iwona Wiśniewska from the Center for east Studies, the strength of the discussion on how to usage frozen assets falls last year. At that time, the strong commitment and willingness to usage this money on the part of the United States (in fact, the confiscation was said), in a way, has affected the thickening of movements on the part of the European Union. – At this point, we're slowing this process down. – notes the analyst.

It besides stresses that For Joe Biden's presidency, 1 could number on the funds being mobilised in 1 way or another.. There wasn't much hope in the Kremlin then. “The Russians knew that money was lost to them. I have the impression that erstwhile Donald Trump's administration took power in Russia increased optimism on this issue," he says. The Russians hope that money will someway become part of the negotiating process between Washington and the Kremlin. “This money is simply inactive in the game and not all are lost to Russia,” Wiśniewska adds.

Legal dispute over Russian assets

There are states in the European Union calling for Russian money to be mobilised and transferred as shortly as possible to Ukraine. Among these countries there are even Poland and the Baltic States. – any say that it is legal – Russia is an aggressor, it destroyed Ukraine and under global law should bear the consequences," explains Iwona Wiśniewska.

In turn, countries which are reluctant to usage specified funds, specified as France, have doubts about the legality of use otherwise these measures. President Emmanuel Macron considers that the frozen Russian assets ‘do not belong to us’ and that the acquisition would be illegal. It is besides against the confiscation of measures Belgium – it is in Brussels that Euroclear is registered.

– The legal dispute is ongoing, but of course the most crucial is political will. And so far there is no specified thing,” emphasizes the expert of the AMA.

Russian money for Ukraine. ‘The footwear is audible’

Another argument from opponents of Russian confiscation is that This would affect the credibility of the European financial market. "This could discourage investors from countries like China and Saudi Arabia to invest capital in the euro area," said the Guardian recently.

– This fear, of course, is heard to any extent, but If all Western countries made a clear decision on Russian money, global investors would have no alternative to place its capital in equally safe assets. Of course, if the United States did not join specified a process, we would have a situation in which investors could control from euro to dollar," explains Iwona Wiśniewska.

Although, as the expert from the AMA notes, the Russian assets themselves stay intact, in a sense this money ‘work’, generating interest. – In accordance with the general legal approach to these measures, interest is no longer Russian. This is why last year the European Commission decided that they should be taxed on excess profits (a form of taxation for companies or industries achieving extraordinary, above-average profits as a consequence of circumstantial circumstances – ed.) and went to Ukraine. Last year, the first specified tranche, around EUR 1.5 billion, was transferred, says the analyst.

In June 2024, at a gathering G7 decided to grant a debt to Ukraine $50 billionthe interest on frozen assets to be secured.

War in Ukraine. What about the Russians' money?

The future of Russian assets is unknown, There is no clear signal from the United States that Donald Trump will adopt on this issue. As Iwona Wiśniewska notes, according to the trial sanctions policy measures in the EU are frozen for six months.

In a twelve weeks' time, EU members will again decide on the continuation of sanctions against Russia, including the freezing of funds. – Knowing that there are countries in the EU reluctant to proceed specified a policy towards Russia (Hungary), the future of the confiscation of these measures is called into question. possibly adequate veto from Hungary And money will become Russian again, says the analyst.

In the Union alternative scenarios for this situation are prepared. According to Wiśniewska, Hungary's veto could only happen if the US were willing to give Russian money. “I think Hungary would not have made the same decision,” he concludes.

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