LOS ANGELES.–Russia responded to the G7 saying June 14 that it would confiscate interest payments on frozen Russian assets in the European Union to provide collateral for a $50 billion loan to Ukraine. Russia said two can play the same game, saying also controls European Union [EU] assets in Russia and won’t hesitate to use them or any money taken by the EU to pay for the Ukraine War. Meeting in Italy over last weekend, EU Commission President Charles Michel said the EU would confiscate frozen Russian assets to help pay for Ukraine’s losses in its war with the Kremlin. EU officials claim the Feb. 24, 2020 war with Ukraine violates the U.N. Charter assuring all member states sovereignty and territorial integrity. Michel said it’s only right that the EU appropriate Russian assets held in Europe to help pay Ukraine for its losses in what the EU calls an illegal military adventure.
Russia considers any confiscation of its assets in Europe a violation of international law governing investments in foreign countries. No meeting of G7 states can supersede the courts and decide how and in what way to liquidate Russian assets in Europe. Our country has significant amounts of Western funds and property that are under Russian jurisdiction, all of this may be subject to Russian retaliatory policies and retaliatory actions,” said Kremlin Spokeswoman Maria Zakharova. “Of course, no one will disclose the nature of these retaliatory actions to you. But the arsenal of political and economic countermeasures is wide,” putting the EU on notice that there will be consequences to any G7 or EU actions against Russia. Stealing Russian assets to hand the bankrupt Kiev government Russia assets would be an act of war, grounds for retaliatory measures.
Zhakharov and Kremlin Spokesman Dmitry Peskov have told the U.S. and NATO that confiscating Russian property only escalates the Ukraine War, does nothing to promote peace and normal diplomatic relations. President Joe Biden, 81, and 46-year-old Ukrainian President Voldodymyr Zelensky, have rejected all peace proposals from a variety of countries, insisting they all favor Russia. Zelensky set unrealistic conditions for peace talks, saying all Russian troops must leave Ukraine, 71-year-old Russian President Vladimir Putin must be prosecuted for war crimes and the Kremlin must pay for war reparations. Before the June 14 G7 conference in Italy, Putin said he was ready for an immediate truce if Kiev would renounce any attempt at NATO membership, recognize Russia sovereignty over Crimea and remove troops from Donetsk, Luhansk, Kherson and Zaporihzhia. Putin never said his demands were non-negotiable but a starting point for ending the war.
EU officials are playing games with Russian assets, violating international financial agreements and customs, all because they have little leverage over Russia. Russia holds some 260 billion euros [$281 billion] in Russian assets in Central Bank reserves, currently frozen under a sanctions regimen since the Ukraine War. EU officials said they would cover about 50% of the $50 billion loan to Kiev, thought Italian Prime Minsiter Giorgia Meloni said the $50 billion would come from the U.S., Canada, Britain and possibly Japan, leaving the EU out of any cash payments to Ukraine. If the EU goes ahead with the G7 plan to use at least interest payments on Russia’s EU investments, Russia could move to confiscate foreign investors assets and securities held in “Type C” accounts blocked since the Feb. 24, 2022 Ukraine War. Russia has ways to retaliate against EU confiscation of Russian assets.
Instead of working on a peace plan, the G7 has escalated the conflict, threatening to start confiscating frozen Russian investments in Europe. Putin showed a willingness to engage in truce, ceasefire or peace talks, all of which require negotiation-and-compromise. Biden has said that, if reelected, he would keep funding the Ukraine War into the foreseeable future, continuing to drain the U.S. Treasury. Former President Donald Trump promises, if elected, to end the war in the first 24 hours. Trump believes he has the rapport with Putin to meet all conditions to end the war, whether Ukraine insists on keeping it going. Trump would tell Zelensky he can no longer count on U.S. funding without going to the peace table to negotiate and compromise on a lasting settlement with the Kremlin. Zelensky’s conditions for peace talks prevent any real attempt at ending the conflict.
Some EU countries, like Viktor Orban’s Hungary, have signaled they have no intent of confiscating frozen Russian assets, making the G7 plan less tenable. Zakharova said some EU states understand the toll it would take “because they understand the costs will be extremely painful.” EU leaders needs to lean of Biden to move the Ukraine conflict to the peace table, knowing that the war has catastrophic consequences to Ukraine, whether they get all their land back or not. Zelensky made the cardinal mistake opting for war with the Kremlin over negotiation and compromise. Putin offered to settle the conflict in March 2022, telling Kiev he would pull back his troops if Ukraine agreed to not join NATO, recognize sovereignty of Crimea and independence of Donetsk and Luhansk. Over two years later, Zelensky lost 20% of Ukraine’s sovereign territory and destroyed the country.
About the Author
John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He’s editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.
