G7 countries may agree to confiscate russian assets on a phased basis

Leaders of major Western democracies will hold a virtual summit to mark the second anniversary of the full-scale war in Ukraine, hosted by Italy. On the agenda will be the question of what to do with russian assets that were frozen at the beginning of the war, totaling about 260 billion euros.

The US, UK, Canada and Japan have long supported the idea of confiscating these assets and using them to help Ukraine. But most of this money is kept in the EU, about 191 billion euros of it in Euroclear, a financial institution in Belgium. France, Germany, and Italy have been very reluctant to agree to seize the money, according to The Times.

For those who want to confiscate russian assets, their arguments are moral and practical. Putin has abandoned all notions of law and humanity by unleashing aggression and occupying someone else's territory. It makes no sense to allow anyone to keep their assets legally when they have become an international criminal in many ways.

As for the leaders who advocate the opposite point of view, their arguments boil down to legality and precedent. Freezing assets is one thing, but confiscating them from a country with which they are not at war is quite another. Protracted litigation may ensue. These strong arguments from both sides illustrate that making important foreign policy decisions, even in extreme circumstances, is not always easy.

"As a result, the G7 leaders are likely to grasp for an easily accessible compromise. They are likely to focus on the use of income from assets - interest on them and profits from maturing assets," The Times notes.

russia has no legal claim to these revenues, so it's easy to agree with this. The problem is that this will amount to only 5-6 billion euros a year - too little to provide serious assistance to Kyiv or punish Moscow.

What should the G7 leaders do? First, they should recognize, albeit reluctantly, that in principle russia's assets can be confiscated.

They should ask themselves under what circumstances they would ever agree to unfreeze the money and return it to Putin. If Ukraine is defeated and occupied? If there is a ceasefire, but with a constant threat of a new military conflict? If Ukraine survives, joins NATO, and russia is busy rearming? If russia is defeated but refuses any compensation for lives and destroyed cities? In which of these scenarios will they send hundreds of billions back to Putin or his successor?

We have already passed the stage when these assets can be returned. They are better used to support Ukraine and impose ever tougher sanctions on Putin, the publication reports.

If the G7 needs a compromise, it can agree to confiscation on a phased basis. It's impossible to put a price on unceremoniously destroying peace in Europe, but $30 billion for every month of the ongoing war is a big enough number to matter to russia and be meaningful to Ukraine.

Source: The Times