29th Mar 2023

Russia's $300bn on table in EU talks on war repairs

  • Half the Kremlin's foreign reserves could be tapped, according to four EU states (Photo: Dennis Jarvis)
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The West should use a $300bn (€284bn) hoard of frozen Russian treasure to rebuild Ukraine, four EU states are lobbying finance ministers to consider.

"Like-minded nations have frozen around $300bn out of $640bn that the Russian Federation had accumulated in its foreign currency reserves — this constitutes a substantial source of funding for Ukraine and its post-war needs," Estonia, Latvia, Lithuania, and Slovakia plan to say in a joint declaration seen by EUobserver.

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"On top, we need to pursue sound legal grounds to confiscate the assets of sanctioned Russian individuals, and also use these funds for reconstructing Ukraine," the draft declaration adds.

"In cases where legal ways to confiscate the assets will not be identified, it should be used as leverage and released only once Russia compensates Ukraine for all the damages done," it says.

The declaration is meant to be published on Tuesday (24 May), when EU finance ministers meet to discuss Ukraine rescue measures.

The intervention comes amid EU talks on the 6th and 7th waves of sanctions to be imposed on Russia.

These are to include an oil embargo and blacklisting of Russia's Patriarch Kirill, as well as Russian president Vladimir Putin's girlfriend Alina Kabaeva, diplomatic sources said.

But the Baltic States and Slovakia say all Russian business should be choked off in future.

"Ultimately, if Russia does not stop military aggression against Ukraine, there should be no economic ties remaining between the EU and Russia at all — ensuring that none of our financial resources, products or services contributes to Russia's war machine," they say.

The cost of war damage has already surpassed $600bn in Ukraine and was rising every day, the four countries note.

"The Russian state must be held accountable for its unjustified military aggression against Ukraine and the war crimes committed against the Ukrainian population, in line with the principle 'aggressor pays'," they add.

The EU Commission announced last week its lawyers were also working on ways to make Russia pay.

Meanwhile, in the EU Parliament, far-left MEPs tabled an amendment calling for the international community to cancel Ukraine's debt.

They framed their proposal both as war relief and as a fight against "neoliberal" ideology, but the amendment failed to pass by a mile last Friday.

"It seems better to pay off those who trusted Ukraine with their money [its international creditors] from confiscated Russian assets rather than punish them," Radek Sikorski, a Polish centre-right MEP who voted against the idea, told EUobserver.

The Ukrainian mission to the EU declined to comment.

Diplomatic sources in Brussels said far-left MEPs had in the past played into the hands of Russian propaganda, either knowingly or unknowingly.

Asked by EUobserver if Russia's war had ended the far left's romance with the Kremlin, Miguel Crespo, a Spanish far-left MEP, said: "The LEFT [group in the EU Parliament] has traditionally been led by Eurocommunist parties that had a particular relationship with the post-Soviet universe".

"But since a few years we have been gaining weight with another left, more linked to social movements, such as feminism or environmentalism, with new political practices", he added.


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