Biden administration also increasingly on board with transferring seized Russian funds to Ukraine
In a significant shift from prior policy, German Chancellor Olaf Scholz on Friday endorsed a plan to buy weapons for Ukraine using profits generated from seized Russian assets.
He made the announcement in Berlin at a press conference alongside French President Emmanuel Macron and Polish Prime Minister Donald Tusk. “We will use windfall profits from Russian assets frozen in Europe to financially support the purchase of weapons for Ukraine,” Scholz said.
The Biden administration has also of late been increasingly on board with transferring of seized Russian funds to Ukraine. But it remains that Germany, France and Italy have so far opposed giving the underlying assets to Ukraine to Kiev, but only the profits generated via investments.
The Wall Street Journal details, “Two-thirds of the roughly $300 billion in reserves were sitting in European banks and clearinghouses. As those assets mature and are reinvested, they have generated profits that EU officials say could reach 15 billion euros, equivalent to more than $16 billion, over the next four years.”
The report notes further that “The bulk of the European assets were held by Belgium’s Euroclear clearinghouse.”
The Western allies have out of recent desperation over Ukraine’s diminished ammo been getting creative, and seeking to find loopholes in order to free up extra funds that could be used in the war effort.
Britain has meanwhile been at the forefront of countries arguing that the total of all underlying Russian assets should be fully confiscated and used for Ukraine.
“Our view is simple: One day, Russia will have to pay reparations and it doesn’t make sense to wait for those reparations. It makes better sense to use the frozen assets and to make that money available now,” UK Foreign Secretary David Cameron said last week.
This is a point of view that the Biden administration has also slowly come to support. But division remains within the G7, also because what many countries would view as outright theft could sow mistrust of keeping their assets in Western financial institutions, leading to a weakening of international confidence in the euro and dollar.
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