Interesting as we head towards possible talks around private sector debt relief for Ukraine, buzzwords like “burden sharing” come to mind. And absolutely in all these debt restructuring situations, it is important that the private sector does not get better terms than the public sector, and no sense of the private sector guys being bailed out by the taxpayer.

The Paris Club led with the debt service suspension agreed for Ukraine in August 2022. For the private sector, this was initially for 24 months, but the Paris Club of official creditors extended this to the end of the current IMF EFF to the end of 2027. The IMF has asked the government to engage in talks with the private sector early this year, prior to the end of the 24-month service suspension, in the hope of securing the bulk of the $14.8 billion financing contribution from debt relief to Ukraine assumed in the total $122 billion package for Ukraine, agreed as part of the IMF EFF.

Advertisement

It's a bit weird that the private sector debt treatment is leading the way – the IMF has been assured that the Paris Club will undertake further debt treatment towards the end of the IMF program, in 2027. Not sure why the Paris Club treatment is not happening in parallel with the private sector treatment – why the delay? Why not some kind of comparability?

I think the market gets the burden-sharing story. But the elephant in the room herein is that the West is shouldering ALL the burden, and there is ZERO burden sharing being applied to Russia. How come the G7/IMF are talking about Paris Club and private sector debt relief for Ukraine, and actually writing big dollar and euro checks for Ukraine, while Russian assets – the $300 billion-plus in Western jurisdictions are being left untouched?

Ukraine Regains Position Near Chasiv Yar as Russia Intensifies Offensive
Other Topics of Interest

Ukraine Regains Position Near Chasiv Yar as Russia Intensifies Offensive

The capture of Chasiv Yar could be both a strategic and symbolic victory for Moscow ahead of the May 9 Victory Day, but Ukraine stands defiant in its defense before Western supplies arrive.

It seems that Western governments are all for burden sharing, but not willing to force Russia to pay the price. Everyone bears the burden apart that is from Russia. How weird is that? Indeed, they appear to be going out of their way to protect Russian assets.

Advertisement

Western taxpayers, Western creditors (pensioners) are bearing the burden for Russia – because our political leaders and policymakers appear to be idiots. That is one conclusion one might draw.

It is interesting here to just think this through.

One argument for not going after Russian assets is that by so doing, Western business assets in Russia will be at risk of tit-for-tat action. Ok, but those Western companies who did business in Russia, invested in Russia, knew the risks. They reaped huge rewards/profits for taking Putin's forty pieces of silver. They got the investment call wrong. Why should Western taxpayers, and Western pensioners/creditors, pay the price for these greedy Western companies’ bad investment calls – by not going after Russian assets now to pay for the costs of Ukrainian victory and the peace. Western taxpayers, and seemingly now creditors/pensioners, are bailing out those private businesses. How wrong is that?

Similar in my mind on Euroclear – it took the decision, balancing the risks, to act as a depository for Russian central bank assets. It made the profits from managing that money, over many years, and when the nature of the Russian state was clear perhaps as far back as 2008 and the invasion of Georgia, then there was WMD use on NATO soil (Litvinenko and Salsbery) and the annexation of Crimea. I would argue that was a bad investment decision – again, why should Western taxpayers and creditors now have to shoulder all the burden to protect the business interests of Euroclear, which made good profits on Russian business in the run-up to the invasion? I get the concern over the systemic risks to Euroclear should Russia choose to take legal action to recover the assets – but how realistic is that? Where could those claims be filed? In Russia – yes, good luck in Western courts Putin. But if the risks are serious, the West should change legislation to protect Euroclear and indemnify it against such risks, as a public good, a national security priority.

Advertisement

All this raises big issues around equity.

Our governments seem to put Russian taxpayers above their own.

Our governments seem to put Russian taxpayers above their own pensioners – holders of Ukrainian debt.

Our governments seem to put greedy Western companies who invested too long and wrong in Russia against their own taxpayers and pensioners.

In conclusion, the case for burden sharing amongst taxpayers, creditors, the public and private sector when it comes to Ukraine is strong. Ukrainians are making the ultimate sacrifice for us, in the defense of Western liberal market democracy. The defense of Ukraine should be a Western public good. But how about getting Russia to bear some of the burden? Russia is absolutely and totally responsible for this war. All I see are excuses by our policy elites to actually avoid getting Russia to pay for its brutal invasion of Ukraine, war crimes and genocide against Ukraine.

Advertisement

We have $300 billion-plus of immobilized Russian central bank assets (cash) in our jurisdictions – how about using it first?

The views expressed are the author's and not necessarily those of Kyiv Post.

To suggest a correction or clarification, write to us here
You can also highlight the text and press Ctrl + Enter

Comments (3)

https://www.kyivpost.com/assets/images/author.png
John
This comment contains spoilers. Click here if you want to read.

@troll Jack Griffin.

It must be agonizing to be forced by your MRGA masters to come back to a website you claim to hate so much. Yet every day you come back just to post your profanity laden comments about how bad the news coverage is here in your 'professional opinion'. You so obviously reveal yourself as a paid MRGA troll when you continually do this troll version of jack.

Maybe you could at least ask the russian script writers for some new material? They are just embarrassing a person of your high intelligent by forcing you to say one of 3 repeated and so easily spotted or debunked things each day.

Thanks in advanced for the concern I'm sure you will shortly express about my health. At least that part I know comes from your true self.....and well ...it is just flattering for me that you continue to care.

Cheers,

https://www.kyivpost.com/assets/images/author.png
Jack Griffin
This comment contains spoilers. Click here if you want to read.

How about some real journalism and analysis instead of this shit? For fuck sake, hire Tucker Carlson, or Glenn Beck, or anyone else with some intelligence and real world knowledge.

John
This comment contains spoilers. Click here if you want to read.

@Jack Griffin, Yeah thats a great idea....hire putintucker. Unlike this author, that feels obliged to stick with facts, putintucker can create news out of thin air for the right price.

I do hope if he meets with putin again he can finally get a definitive answer to interview question Britain's Philomena Cunk's stumped putin with: "What exactly is the the Soviet Onion".

Troll 'Jack'....you've got to watch her interview with your MRGA master....it PUTs PUTintuckers PUTin (alliteration intended) interview to shame.

https://www.youtube.com/watch?v=oONWipjpuDY

The British have awesome senses of humour.

Cheers,

https://www.kyivpost.com/assets/images/author.png
https://www.kyivpost.com/assets/images/author.png
John
This comment contains spoilers. Click here if you want to read.

When doing what is fair for an international crime victim nation (Ukraine) goes against against some transnational finance law in which a war instigating nation (russia) had a say; it only means that law was not thought out fully. It was drafted at a time when the current scenario could not be conceived by those who entered it with good intent (that typically excludes criminally scheming russia).

So leadership please quickly update these international finance laws as needed for the modern world. Or just quickly get around them entirely with an allied war measures act. Will some international trade be impacted? Probably. However should we not already be weaning off trading with nations that are supportive of putin's agenda?

Does our leadership realize how absurd their dithering musings sound when a ruthless dictator is trying to erase a fellow democracy? Let me summarize the stupidity of their dithering conversations with this fictional passage:

"We are unable to sustain the fight to protect democracy because its expensive and it's a 'complex' matter to use $300 billion in war instigator russia's money we have frozen".

Complex? Really? More like STUPID not to confiscate and immediately use it!

Not using russia's frozen assets to support Ukraine is morally wrong (aggressor owes the victim), and unfairly burdens allied taxpayers.....You know; the people who are going to hold you accountable in the next elections!

https://www.kyivpost.com/assets/images/author.png