Interesting to read a Bloomberg article citing a German government official saying they don’t support the use of frozen Russian assets for Ukraine - the official has not even got the balls to go on record, but sneakily looks to brief against Ukraine behind the scenes. Is it a friend of Schroeder?

Germany has been wrong at every step of the way on Russia, and Ukraine, for a decade or longer. And it is absolutely wrong again on the issue of frozen Russian assets - an abundance of caution, as ever, which has been WRONG, WRONG, WRONG, each time when it comes to anything on Russia whether energy dependence on Russia, munitions, and now on financing. Germany will have to roll over. It will have to roll over as it has on Leopards, and will have to do on Taurus, unless it wants Red Army tanks again on the streets of Berlin.

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1. If Germany is blocking the use of the underlying immobilised Russian assets it has to explain how it is going to fund the $100bn annual cost of supporting Ukraine in war, and likely $50bn annual cost of rebuilding Ukraine. As is, the $61bn is still stuck in the US congress, and EUR50bn of EU money is blocked by Hungary. The real politik - German term - means Western taxpayers will not pay the full ticket.

And what happens when Trump comes back to power in 25?

And if we don't finance Ukraine now, it loses, and what does a Ukrainian defeat look like? Think thru that.

2. I sense here that Germany is terrified of going down the reparations route for fear of action by Poland et al against it for WW2 reparations. Understood, but then why should US, UK, French et al taxpayers pay Germany's ticket now on Ukraine, because of that? We don't owe WW2 reparations. Our taxpayers are being made to pay, because Germany does not want to use the obvious choice of frozen RU assets because of fears over WW2 reparations. So how about Germany pays the full bill for Ukraine now? And did Germany not get the big Marshall plan bail out after WW2, so it now needs to repay the favour, fortunately via the $300bn+ in frozen Russian assets.

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Railway Station Destroyed After Russian Attack in Kostyantynivka
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Railway Station Destroyed After Russian Attack in Kostyantynivka

One person was injured in the attack, which also damaged the church and about a dozen houses and shops.

3. G7 is calling for debt relief as part of the IMF support programme for Ukraine - but why should private creditors give debt relief when our governments are not willing to go after frozen Russian assets first? I say no debt relief unless frozen RU assets are tapped first. This should be a huge political scandal in Germany et al, that our governments want to pay Russia back in full, paying for it from tax payers and pensioners dollars.

4. Germany rants on about the rule of law - where was the rule of law when various German politicians and business leaders had their snouts in Putin's kleptocratic trough. Or for that matter where was the rule of law when the UK, Belgium or France, et al accepted the $300bn+ into their jurisdictions when everyone knew this was the profits of kleptocracy and corruption. One man's rule of law is another man's money laundering. And the fact that blind eyes were turned when this money came in is now exactly why the money now has to be paid to Ukraine - because we owe Ukraine.

5. The arguments around risk to reserves currencies is just bull - the message was already sent via immobilisation, so what is the difference to freeze, and confiscate? Then the question is if the $ and Euro, and Pound, Yen, Aussie, et al are out of bounds, where will China put its $3 trillion FX reserves? Same for Saudi et al. There is no alternative to the dollar, euro et al. But what will the status of these reserve currencies be if Russian tanks are rolling thru Ukraine, Poland and on to Berlin.

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Reprinted from @tashecon blog. See the original here.

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Comments (5)

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Peter
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Why is this bullshit opinion full of outright lies written by Ash not deleted yet?

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LM
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Germany is in slow decline. It needs to evolve its economy. Not sure what it would take. But cheap Russian Gas and Oil are off the table for at least a decade.

Peter
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@LM, you have no clue about Germany like Ash

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John
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I have an idea. Give the US and EU frozen assets to the UK to hold. Have the UK make the decision of paying for the rebuilding of Ukraine with the frozen asset money. Have the EU condemn the actions saying it is Putin's money and Putin is going to throw a tantrum. Then Ukraine gets the money, Russia is not going to attack a nuclear armed UK and Russia get fooled out of hundreds of billions of dollars. UK uses the Budapest Memorandum of the UK promise of security assurances as the defense of the transfer of money to Ukraine. The same Budapest Memorandum that Russia signed.

If Biden win reelection, I was considering the suggestion of send the frozen assets to the US for the same process. Though the UK is as good of an option.

David Steel
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@John, As a Brit I completely agree.

The current prime minister Rishi Sunak is facing electoral disaster later this year, all polls show he will lose the election. A firm stance against Russia would help his chances.

In Great Britain we are always up for a scrap, its in our blood, its our national identity. In years past prime minister Margaret Thatcher won mass approval when she put Argentina in their place during the Falklands conflict.

Nothing would prove his credentials better than giving little Putin a good slap and handing that money to Ukraine.

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Imokru2
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Following its experience with Hitler, post-war Germany devised an electoral system in which no party would hold more than 50% of the seats in government. This is known as proportional Representation.
Such a government will behave differently than one who controls the legislature.

Peter
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@Imokru2, completely wrong. The German electoral system can in theory have 100% seats in the parliament Bundestag, which elects the chancellor. The government has no seats, it is chosen by the chancellor and its advisors and may comprise ministers and their secretaries, who do not belong to any party.

Peter
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@Peter, I meant 100% seats of one party in theory.

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Peter
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Timothy Ash is completely WRONG about Germany´s attitude towards Russia. He is making many things up, which do not come close to reality and above all, contradict the TRUTH. Germany provides more than any other country except for the US to Ukraine with respect to military aid. Germany delivers the same amount of humanitarian aid as the US and via the EU nearly the same financial assistance. The US has stopped now corresponding support, due to the foolish Republican party. Probably, Ash wants to obfuscate the fact that the UK provides far less help to the Ukraine. Conclusion: Timothy Ash does not have a clue about Germany of today. He lives in a dreamworld of postwar Germany that was confused by its past. This Germany does not exist anymore.

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