US floats softer alternative to confiscating Moscow’s assets – FT

The West should borrow money against decades’ worth of Russian profits and give it to Ukraine, a senior official has reportedly urged

The US wants to use future profits from seized Russian assets to raise debt on behalf of Ukraine, a senior White House official has said, according to the Financial Times. European allies have resisted Washington’s initial plan to simply confiscate Moscow’s frozen funds.

Western nations have blocked some $300 billion of Russian sovereign assets, most of them in the Belgium-based central securities depository Euroclear. The US government has advocated for the money to be expropriated and given to Ukraine – a step that Russia has said would amount to theft. Officials in the EU are concerned about the legality of the proposed move, as well as its potentially devastating effect on the Western financial system.

European nations are considering whether to take profits from frozen Russian assets and use them to fund weapons and reconstruction projects for Ukraine. However, the same proceeds could be better used as collateral for loans, US Deputy National Security Adviser for International Economics Daleep Singh reportedly argued during a visit to Kiev on Wednesday.

Read more

IMF weighs up confiscating Russian assets

“Instead of just transferring the yearly profits from the reserves… it’s conceptually possible to transfer the ten years of profits or 30 years of profits,” the official said, as quoted by the FT. “The present value of those profits adds up to a very large number.”

Leveraging future profits to receive credit now would allow the West to “supersize the value of these income flows over time,” Singh claimed.

A European official told the newspaper that based on an expected revenue of €50 billion to €60 billion ($53 billion-$64 billion), a bond could generate up to €40 billion today, but warned that this was heavily dependent on future interest rates.

Creditors would also likely have concerns that the Ukraine conflict would be resolved within several years in a deal entailing the return of Russian assets, the report added. State guarantees may address that, but such loan terms could be challenged in some Western jurisdictions, the FT said.


READ MORE: Ukrainian officials’ wealth surged during conflict – media

The US has insisted that Moscow will not have its funds returned until Kiev is satisfied. “Russia must pay for the damage it has caused in Ukraine. And it is not for Russia to decide if or when that happens,” Singh said during his trip to Kiev.

Moscow has warned that it will retaliate for any damage caused to its assets by the West.

US has no ‘Plan B’ for Ukraine aid – Bloomberg

Washington is reportedly “frustrated” that Western efforts to secure funding for Kiev have hit a snag

The US has run out of options to help Ukraine beyond hoping Congress ultimately passes a $60 billion aid package before the frontline starts to crumble under Russian pressure, Bloomberg reported on Thursday, citing unnamed officials. 

According to the outlet’s sources, the administration of US President Joe Biden is growing increasingly “frustrated” with both Republicans and European allies over delays in funding. 

The GOP has blocked Biden’s security package for months, demanding stronger measures to curb illegal immigration on the southern US border.

Meanwhile, House Speaker Mike Johnson signaled earlier this month that the bill could come up for a vote soon with “some important innovations,” including providing Ukraine with loans instead of non-repayable aid.

Read more

Kiev ‘hostage’ to US politics – Zelensky

Bloomberg cited officials lamenting the lack of a ‘Plan B’ apart from the long-awaited $60 billion package. One of the interviewees insisted that the EU start using profits generated by frozen Russian sovereign assets in the West to aid Ukraine.

Moscow has repeatedly labeled the freezing as “theft,” warning of retaliation if the funds are used to help Kiev. 

Another Bloomberg source said the EU should urgently provide Ukraine with more US-made Patriot air defense systems from its own stocks, as the country is coming under recurring Russian strikes targeting its energy, logistics, and military infrastructure. 

Ukrainian officials have complained about the lack of munitions, calling it an increasingly serious problem. General Christopher Cavoli, the head of the US European Command, estimated earlier this week that Ukraine was being “outshot” by Russia at a ratio of five to one. He also said that Russia produces three times more shells than all of NATO. 

With this in mind, Ukrainian President Vladimir Zelensky warned the West this week that Kiev would “lose the war” unless it received a massive US assistance package. Russian President Vladimir Putin has said that the Ukrainian economy is only able to function because of foreign aid, claiming that without regular cash infusions, it would promptly collapse.