Since the conflict broke out in Ukraine, the West has frozen about $300 billion in assets of the Russian central bank. Accordingly, the US and UK are pushing to seize all of this money to finance the government in Kiev.
Specifically, US Treasury Secretary Janet Yellen said this week that the US has a full legal basis to seize Russian assets. Meanwhile, British Prime Minister Rishi Sunak last week called on Western countries to be "bolder" in seizing frozen Russian assets.
The West has frozen about $300 billion in assets of the Russian central bank since the beginning of the conflict. (Photo: Bloomberg)
However, the European Union (EU) has warned of the legal and financial implications of doing so. Speaking on the sidelines of the G20 finance ministers meeting in Sao Paulo (Brazil) on February 28, French Finance Minister Bruno Le Maire publicly opposed Ms. Yellen's views. This move has partly shown the division within Western countries.
Specifically, Mr. Le Maire shared: "Currently, we do not have a legal basis to confiscate Russian assets. We will need to do more if we want to implement this step."
On the other hand, German Finance Minister Christian Lindner said the EU is considering "a legally safe and feasible step in the short term" to use the proceeds for the purpose of supporting Ukraine.
In 2023, the revenue from Russia's frozen assets will amount to $4.8 billion, which European Commission President Ursula von der Leyen has proposed using to support Kiev.
Washington has supported the idea of a Russian wealth tax, but has noted the legal issues involved. Meanwhile, France and Germany, along with the European Central Bank, have expressed the most concern that seizing such assets could negatively impact financial stability and erode confidence in the euro’s reserve currency status, according to Bloomberg.
Moscow has repeatedly warned the US and its allies against seizing Russian assets in the past, saying any such move would be considered "theft" that violates international law and undermines reserve currencies and the global financial system.
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