A simple principle underpinned Thursday’s controversial decision by the United States and key allies to take profits from Russian sovereign assets to support Ukraine: Moscow must make reparations.
European Council President Charles Michel told CNBC’s Steve Sedgwick after leaders of the G7’s major democracies agreed in principle to release a $50 billion loan to Ukraine. “Russia must pay a price,” Sedgwick said. Western countries froze 300 billion euros ($322 billion) of Russian central bank assets.
The G7 includes the United States, Canada, the United Kingdom, France, Germany, Italy and Japan.
U.S. President Biden publicly touted the “major results” of the G7 consensus on Thursday press conference Ukrainian President Volodymyr Zelensky also attended the meeting after the two leaders signed a ten-year bilateral security agreement.
“I’m pleased to report that this week the G7 signed a plan to finalize and release $50 billion in proceeds from these frozen (Russian) assets and use that money for Ukraine, which is another reminder for Putin. : We will not back down,” Biden said.
Moscow had previously condemned the move and warned of serious consequences if Western leaders went ahead with the proposal. Questions have also been raised about the legality of setting a precedent in which Russia has been cut off from its frozen assets but retained ownership of them. Confiscation of assets requires a lengthy judicial process, but profits generated from seized assets are easier to obtain.
A similar decision was taken by the G7 in 1992, when the UN Security Council authorized measures to seize frozen Iraqi assets and directed them to compensate victims of Baghdad’s invasion of Kuwait.
Michelle stands by the decision. “This is a blatant violation of international law, a blatant aggression against Ukraine. (Moscow) is the aggressor, there are victims, there are rules at the international level. They must pay a price,” he said.
“That’s why … this money is frozen, that’s why this money is frozen, I’m very confident that we can use this money to support Ukraine because it’s fair.”
The proposal must now pass various legal hurdles and gain support from European countries, where most of the frozen Russian assets are located.
Michel said the G7 allies could finalize the details of an agreement “in the coming weeks” to provide funding to Kyiv as soon as possible, noting that “an additional 50 billion euros for Ukraine means more military equipment and more production capacity” and capabilities” for Ukraine to defend itself and defend our common European values. “
U.S. Treasury Secretary Janet Yellen said on Thursday that more loans could be backed by interest generated from Russia’s frozen assets.
“This is not the last time this will be done. This is the first, and there will be more if necessary,” said Yellen, who has been actively involved in negotiating the deal. “We are getting the Russians to help compensate for the damage caused.”
Russia’s all-out invasion of Ukraine is entering its third year, destroying settlements and critical infrastructure in the country under sustained aerial bombardment. world bank February estimate Ukraine’s reconstruction and recovery will require $486 billion over the next decade – costs are likely to have increased since this review.
Kyiv’s allies are increasingly realizing that war must precede peace in discussions about Ukraine’s reconstruction.
“I think if we want to rebuild Ukraine as quickly as possible, we need to provide more air defense systems, that’s a top priority,” Michel said. “Today it’s also an important decision, how do we provide more support and more support to the Ukrainians?” Multiple military equipment, including in the field of air defense.”
The G7 is expected to issue a formal statement later on Friday, concluding a two-day summit in Borgo Egnazia in Italy’s Puglia region that welcomes senior EU officials officials, including European Commission President Ursula von der Leyen; Some other heads of state and heads of international organizations.
The annual summit comes as most G7 leaders face domestic turmoil, including national elections and falling support. Only Italian Prime Minister Georgia Meloni remains high in the polls following the success of her nationalist Fratelli d’Italia party in European Parliament elections over the weekend.
About The Author
