It is interesting that the ECB and EU seem to be closing ranks around Euroclear on the debate around using immobilized Russian assets for Ukraine. The Belgian depository is being ring fenced now as “systemic - with the argument going that we cannot go after Russian assets there as it might risk a run on the euro or legal action by Moscow which could risk the stability of the Belgian based depository.

Both arguments appear more like scaremongering (bollox actually - excuse my French or Flemish) and indeed if Euroclear was so systemically important then it could be indemnified against any future lawsuits by Moscow by the EU. I would argue that the defeat of Ukraine by Russia, which would send Red Army tanks West again, is a much bigger and more likely systemic risk to Europe, and the euro, if we don’t secure Ukraine’s war time financing with the use of immobilized Russian assets.


As yet the IMF’s numbers don’t add up and I just doubt the long-term commitment by Western taxpayers to spend $100 billion a year to keep Ukraine in the war - actually we are already failing here as reflected in ammo shortages now on the front line. The only assured source of long-term financing is from immobilized Russian assets.

Meanwhile, the IMF is asking private creditors - pensioners - to stump up a $14.8 billion financing contribution to Ukraine via a new debt treatment. All well and good (creditors have already halted debt service payments to August 2024 and in a worst case scenario likely will extend that service halt to run in parallel to the Paris Club service suspension to 2027 - which will get close to the $14.8 billion financing contribution anyway) but how about first/also getting Belgium to stump up the EUR6-7 billion in interest earned on immobilized Russian assets.

Belgium Prohibits Ukraine from Using F-16s to Strike Russian Territories
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Belgium Prohibits Ukraine from Using F-16s to Strike Russian Territories

The clause, included in the agreement signed by Ukraine and Belgium on Tuesday, prohibits Kyiv from using Belgian military aid to strike targets outside of Ukrainian territory.

As yet, the EU is only talking about utilizing the interest earned on these assets from 2024. Why? It is beyond me why Belgium gets to profiteer from the war by keeping the earnings from 2022-23. And how about Euroclear contributing the profits made on its business managing Russian central bank reserves way back in time when it was already clear that Russia was a fascist state acting in a malign manner against the West. How far back?


Perhaps 2008 and the invasion of Georgia, the poisoning of Litvinenko or Skrypal, or 2014 and the annexation of Crimea, and the first Russian invasion of Donbas - does Euroclear do ESG? I wonder.

The IMF talks about burden sharing, but at the moment I only see Western taxpayers and creditors (pensioners paying) doing this so how about Russian taxpayers, Belgium, and Euroclear helping share the burden a bit? 

Reprinted from the author’s @tashecon blog! See the original here.

The views expressed in this opinion article are the author’s and not necessarily those of Kyiv Post.

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