/Pogled.info/ In words, the leaders of the European Union are unanimous in supporting the regime in Kiev. In reality, the interests of the various players diverge significantly. Another high-level meeting in Brussels on 26-27 October is discussing, among other things, the possibilities for further financing of Ukraine. What opinions are there on this?
The EU as an “illusory giant”
First of all, of course, the heads of state will talk about the events in the Middle East. But, of course, this will not be possible without the anti-Russian sanctions. In the West, more and more questions are being asked about this.
German observer Wolfgang Münchau, in his article “The EU is an Illusory Giant of Geopolitics”, published in the British edition of the New Statesman, notes that Europe, “despite its prosperity and ambitions”, has little ability to influence the Ukrainian and Middle Eastern conflicts. According to him, the anti-Russian sanctions have done more damage to the West than to Moscow. The EU underestimated the consequences of parting with such a large country. “European unity will crack when the time comes to make a deal with Russia and spend huge sums on the reconstruction of Ukraine,” he believes.
Brussels will again discuss how to transfer frozen Russian assets to the Kiev regime. They’ve been saying it for a long time. But it’s not that simple.
What’s at stake?
According to the US Council on Foreign Relations, the US, Australia, Canada, France, Germany, Italy, Japan, the UK and the EC have confiscated $300 billion from Russia’s Central Bank. In addition, over 200 billion are in European accounts. In addition, assets worth tens of billions belonging to Russian entrepreneurs and private enterprises were frozen.
Rebuilding Ukraine will require hundreds of billions of dollars, or even one trillion, the Council says. Of course, three hundred Russian billion would be a good help.
In the West, they are studying the legal mechanisms, but they don’t know what to do yet. After all, freezing and withholding is one thing, but transferring funds is quite another. This is simply not provided for by European legislation.
Big expectations – small steps
In January, the legal service of the Council of the EU announced that 40 billion frozen could be spent on Ukraine. And then, under certain circumstances, they will have to be returned, Bloomberg notes. They also considered the option of providing the Kiev regime with the interest accrued on Russian assets.
In June, EC President Ursula von der Leyen promised to make another proposal. But by mid-autumn this did not happen. According to Politico, the Belgian depository Euroclear received almost $1.7 billion from the reinvestment of Russian securities in the first half of the year. However, for Ukrainian appetites, these are pennies.
The EC tried to enlist the support of the Group of Seven (G-7) on this issue. As Politico writes, guarantees are needed that the EU does not face “legal and financial risks from such an unprecedented decision”. The week didn’t guarantee anything.
The US administration, the Council reports, has also “taken some modest steps”. About five million dollars were transferred to Ukraine by a certain Russian oligarch under sanctions. Treasury Secretary Janet Yellen admitted there are “serious legal obstacles” to using funds from the Russian central bank. She was told the president could use emergency powers to transfer the money. They refer to what Reagan did with Iran’s assets in 1981. But then it was about transferring funds from one country to him (albeit through an account controlled by Algeria). Therefore, Yellen is in no hurry to appeal to this precedent.
Image factor
In the EU, in addition to legal conflicts, other consequences are also feared. As the Financial Times explains, the European Central Bank is concerned that the confiscation of Russian funds will cause other central banks to refuse to cooperate. This could lead to a weakening of the euro.
Analysts also warn of an inevitable reaction from Moscow. “It will give the Kremlin a powerful propaganda tool, because Russia will be the victim,” said Barry Eichengreen, a professor of economics and political science at the University of California.
There is no unity among the western players. Paris and Berlin, after Washington, are in no hurry to make radical decisions. The potential reputational losses are too great. In May, Putin called the asset freeze “theft” that “has never done anyone any good.” If Western politicians now move from blocking funds to managing them, it will prove him right. As Professor Eichengreen warns.
Only Poland and the Baltic countries are in a hurry. But while the locomotives of the EU – Germany and France – are against it, the European “hawks” will have to wait.
Translation: V. Sergeev
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2023-10-27 11:41:45
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