Belgium proposes G7 to use frozen Russian assets to benefit Ukraine

The flag of the Kingdom of Belgium. Stock photo: Getty Images

The Belgian government has proposed the Group of Seven (G7) countries a plan that will see frozen Russian assets being used to benefit Ukraine.

Source: European Pravda, with reference to the Financial Times

Details: Belgium’s plan envisions that Ukraine’s allies could raise debt to fund it, “using Russian assets as a backstop for the repayment in a move that would force Moscow to start paying for its invasion,” the FT wrote.

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The coalition supporting Ukraine would demand that Russia repays the debt and, if it fails to do so, would seize frozen Russian sovereign assets instead, officials familiar with the discussions told the FT.

The plan is designed to allow the G7 to raise funds for Ukraine without immediately settling legal issues around other nations’ grounds for the seizure of Russian sovereign assets.

“One of the things that this would do is put off the question of what happens to the Russian sovereign assets, even though they would be used as collateral,” a person with knowledge of the negotiations told the FT.

An anonymous official said that Belgium has put forward this plan of raising debt against the Russian assets in an effort to find a compromise between the US position and that of Ukraine’s European allies.

“Using the assets as collateral to raise debt is an attempt to find a compromise between different viewpoints around the table, both within the EU and […] the G7,” the official said.

Background:

• Permanent representatives of the EU countries at a meeting on 29 January coordinated the creation of a separate account to which the interest from taxed income of frozen Russian assets will be transferred.
• Earlier in January, EU foreign affairs ministers reached a political agreement concerning the plan to use Russian assets to support Ukraine.
• However, a number of EU member states are against the confiscation of these assets due to legal hardships. The compromise is to tax the income of these frozen assets and transfer these funds to Ukraine.
• Meanwhile the US is promoting the idea of the confiscation of frozen assets. Last week profile committees of the Senate and the House of Representatives of the US adopted a law intended to help create conditions for confiscation of Russian assets and their transfer to Ukraine to support its reconstruction.

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