according to Speaking to the Financial Times, Belgium has proposed to G7 countries a plan to unfreeze Russian assets in Europe and redirect them to Ukraine’s interests. The Belgian government is proposing to issue debt to raise funds for Ukraine’s reconstruction. Russian assets will be used to repay debt.
After Russia’s full-scale invasion of Ukraine, Western countries froze approximately $300 billion in Russian state assets. However, what to do with them has not yet been decided.
The Belgian government is proposing to issue debt to raise funds for Ukraine’s reconstruction. Russian assets will be used to repay debt. The FT explains that Ukraine’s allies will demand repayment of debts from Russia under the issued obligations, and if Russia refuses, the allies will seize Russia’s frozen assets.
“One of the consequences of this would be to postpone the question of what happens to Russian state assets, even if they are used as collateral.” One FT official said:
According to the newspaper, talks are underway between the US and the EU regarding Russia’s frozen assets. And Belgium’s proposal was an attempt to find a compromise between different views within the EU and the G7.
Some countries are hesitant to completely seize Russia’s frozen assets due to legal and economic risks. The United States, Germany, France and the ECB have warned that mass confiscations could undermine financial stability.
But pressure is mounting to redirect some of the frozen funds to rebuilding Ukraine. Earlier this month, the Biden administration supported legislation that would transfer some seized Russian assets as aid to Ukraine.
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