It was interesting to read a well-known political risk outfit put out a piece today that basically said forget about using Russian frozen for Ukraine reconstruction.
The gist of the argument seems to be that the weight of European legal opinion seems to suggest “the computer says no” because it somehow would question the sanctity of private property rights in the West.
Guess this is the body of U.K. and European legal opinion that has been taking Putin’s oligarchs’ forty pieces of silver for years.
Excuse my cynicism therein - slap my wrist.
I attach my own thoughts on the subject some weeks back.
“In the light of the Dnipro apartment bombing I again ask how come none of the $400bn in Russian frozen assets in the West have been transferred to Ukraine? And, in particular, why are the U.K. and US Treasuries not doing more to make this happen?” Read here.
A few additional points I would make herein though:
First, the same political risk consultancy report concludes that with frozen assets not being available for Ukraine reconstruction, and Western taxpayers likely unwilling to stump up anything close to the $500bn - $1 trillion in reconstruction costs the onus will then fall on the private sector. Message to Mission Control - the private sector will never fund that scale of reconstruction needs. Not unless a proper institutional structure is put around the whole reconstruction effort (see my piece also there on AURA - Agency for Ukraine’s Reconstruction and Accession, to the EU).
But if there is no ability to use frozen assets, and the private sector and Western taxpayers are not able to stump up enough cash, then reconstruction simply won’t happen. That’s a fact.
Maybe the lawyers and EU and Treasury bureaucrats did not get the memo - Putin is at war with the West thru Ukraine. We have to make sure Ukraine wins the war and the peace or Putin wins and our very system of government and governance fails. Kleptocracy will be on the ascent and rampant across the West - forget about those protected property rights as above. That’s then an academic argument.
Second, and as I argued in the piece on my substack page, Russia is clearly responsible for the destruction in Ukraine - make it pay reparations and change laws if necessary to make this happen. Should the huge destruction of Ukrainian property, war crimes and yes Genocide by Russia against Ukraine not go without punishment and reparations? I just don’t think so because some pen pusher at the EU or U.K./US Treasury says no.
Who is going to pay? If no one does Ukraine does not get rebuilt.
Third, in many respects I feel that these opponents of using frozen Russian assets just do not understand the momentum here. Indeed, thru this war lots of things happened which had appeared unimaginable - often days before they happened:
* the actual invasion (albeit I did expect it);
* Russian CBR assets being frozen;
* Russia being thrown out of investment indices;
* SWIFT sanctions;
* Russian energy and banking assets sanctioned:
* NATO supplying increasingly sophisticated weapons from first T72s, S300s, Mig29s, HIMARS, now Abrams, Patriots, Leopards, and likely soon F16s or equivalents.
Anything is now possible and should be when we think of what we need to do to ensure Ukraine’s victory. Putin has clearly stated he is at war with the West, with us. We are fighting here for the survival of our system, not just Ukraine’s and if ensuring Ukraine’s success means transferring frozen assets from the account of a fascist, war criminal and genocidal maniac, to rebuild Ukraine to ensure our defense, then just get it done.
This is now a national security priority which trumps concerns over any potential erosion of the sanctity of property rights.
Reprinted from the author’s @tashecon blog See the original here.
The views expressed in this article are the author’s and not necessarily those of Kyiv Post
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Comments ( 1)
The problem is how? France and Germany subverted the UN Iraq oil embargo by opening accounts in Amman Jordan to purchase Iraqi oil below market prices. That's why they were not in support of invading Iraq. In April of 2007 the low-level Iraqi Oil Ministry bureaucrats who spirited away the hand ledger books for safekeeping believed it was safe to reveal those actions of France and Germany. There will always be countries willing to subvert such sanctions against Russia for their own selfish economic gain.