The German government supports using frozen Russian funds – which amount to billions of euros – to help Ukraine rebuild itself, provided legal questions are addressed, and the action is done in conjunction with other allies.
In 2022, Ukraine’s economy is expected to have shrunk by around 32% following Russia’s invasion in February. Much of the country is in ruins, and Ukrainian politicians have long argued that the frozen assets of the aggressor should help them rebuild.
The government under Chancellor Olaf Scholz supports Ukraine’s demand for war reparations but has yet to take an official position on the seizure of Russian state assets, Bloomberg reported, citing sources familiar with the discussions. The issue is complex, and some members of the governing coalition are more convinced than others, they added.
Reportedly, green Foreign Minister Annalena Baerbock is arguing for hard measures that include seizing at least parts of the frozen Russian assets.
The EU has frozen €17 billion in funds for 90 Russian nationals, €2.2 billion of which is located in Germany, European Justice Commissioner Didier Reynders said in late October.
The real prize, though, is €300 billion of frozen currency reserves of the Russian central bank. Reynders noted that it is “possible to keep these €300 billion as a guarantee until Russia voluntarily participates in the reconstruction of Ukraine.”
German Finance Minister Christian Lindner is reportedly sceptical of such plans. Sources cited by Bloomberg say he worries that confiscating Russian central bank reserves would create a dangerous precedent and lead to a messy legal battle.
Since the war started, how to deal with Russia’s frozen wealth has made little progress. Hawkish Eastern European countries and the Baltics have long called on their partners to use the frozen assets. The ongoing discussion in Berlin may be a nudge for these stalled talks.
(Nikolaus J. Kurmayer | EURACTIV.de)
Source: euractiv.com
