LOS ANGELES.–German Chancellor Olaf Scholz, 65, said he agreed with a European Union [EU] proposal to use frozen Russian assets totalling over $200 billion to help finance arms purchases for Ukraine. Scholz only agreed to use interest payments on Russia assets currently under EU control, not the actual principal. Russian President Vladimir Putin warned the EU it would be an act of war to confiscate Russian assets, no matter what was happening on the Ukraine war front. “It’s important that we also agree that this money can be used for arms purchases not only in the EU, but for purchases worldwide,” Scholz told the press after meeting with three Baltic State presidents in Riga, Latvia. Baltic States of Lithuania, Latvia and Estonia all have concerns that Putin would try to take back the former Soviet satellites in any future move on Europe. Putin has denied any such intent.
EU holds over $200 billion in securities and cash in Russian assets, demanding that Russia be penalized for its unlawful war in Ukraine by transferring interest payments and dividends to the EU for the purpose of subsidizing arms payments to Kiev. EU’s 75-year-old Spanish Foreign Policy Chief Josep Borrell proposed taking 90% of Russia’s interest payments from assets held in the central securities depository Europclear in Belgium, all because the EU and U.S. view the Ukraine War as an unlawful incursion into Ukraine. Scholz agrees with Borrell’s plan to use dividend interest payment to reimburse the EU for arms purchases to the Kiev government. Putin has said if the EU steals Russian assets for the purpose of subsidizing the war against the Kremlin it would be an act of war. Putin wants to resolve the war through negotiation and compromise.
Since the Ukraine War began Feb. 24, 2022, Putin has asked Ukraine to stop seeking to join NATO and receive copious amounts of arms from the United States. When the Maiden Revolution happened Feb. 22, 2014, the duly elected, Kremlin-backed government of Viktor Yanukovych was overthrown in a CIA-backed coup. Putin annexed Crimea March 1, 2014 to protect his Black Sea naval base in Sevastopol, Crimea. Since that time, the Obama White House continued to arm Ukraine with the eventual purpose to driving Russia out of Crimea and off Ukrainian land. But before the old Soviet Union disbanded in 1991, Ukraine was a Soviet satellite, awarded Crimea by Soviet Premier Nikita Khrushchev in 1954. Putin annexed Crimea March 1, 2014 all because the new Pososhenko government would not make arrangements to retain Russia’s Black Sea fleet.
Leading up to the Feb. 24, 2022 Russian invasion, Putin asked 81-year-old President Joe Biden to discuss new security arrangements for Ukraine, opposing the dangerous level of U.S. arms flowing into Ukraine. When Biden refused to discuss any new arrangements, Putin invaded Ukraine to protect Russian interests in Crimea and the Donbas region, where Russian speakers in Donetsk and Luhansk were threatened by as six-year-old Ukraine military operation against Russian forces. Zelensky took office May 20, 2019 from former Ukrainian President Petro Poroshenko, promising to cut ties with the Kremlin. When Zelensky kept asking for NATO membership, Putin had no choice but to protect Russian national security by invading Ukraine. Bide quietly joined Zelensky’s war against the Kremlin, realizing that he must save Ukraine or risk a takeover of more EU countries.
Scholz decided to use Russian interest payments to subsidize arms shipments to Ukraine, it’s not at all altruistic. Scholz sees the EU getting reimbursed for its arms and cash given to Ukraine. Scholz advocates ramping up arms production in the EU, knowing what’s at stake if Russia decides to expand beyond Ukraine. Lithuanian Prime Minister Ingrida Simonyte said the Europe doesn’t produce enough arms for its self-defense, calling on the Brussels-based EU to improve arms production at its Rheinmetail factory in Lithuania. Whatever arms shortages the EU faces, it’s far better off managing a meaningful peace with the Russian Federation, something the Biden administration hasn’t done. Without normal diplomatic relations with the Kremlin, the EU remains on a war footing for the indefinite future. Only by improving diplomacy can the EU avoid the kind conflict in Ukraine.
Scholz walks a fine line deciding to rob Russia of its rightful investment dividends for the purpose of subsidizing arms and cash deliveries to Ukraine. Spending more time on diplomacy with the Kremlin, would be a far better investment than spending a higher percentage of the EU economy on weapons systems. Scholz went, under his predecessor Chancellor Angela Merkel, from a working trading partner with Russia to a bitter enemy. Scholz would spend his time wisely meeting with Biden to work on improving diplomatic relations with Russia. For that to happen, the U.S. and EU would have to commit itself to the June 1 peace talks in Lucerne, Switzerland, designed to find a political solution to the Ukraine War. As long as Ukraine’s 46-year-old President Volodymyr Zelensky demands that Putin be prosecuted at The Hague, leave Ukraine for good and pay war reparations, there will be no peace.
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.
