Britain would be prepared to loan Ukraine all frozen Russian central bank assets in the U.K., Foreign Secretary David Cameron has said.
Speaking to peers on Tuesday night, Cameron said that the decision would be made on the basis that Moscow will be forced to pay reparations to Kyiv after Russian President Vladimir Putin's war in the neighboring country comes to an end, British newspaper The Guardian reported.
His remarks come after The New York Times in December reported that the Biden administration could be close to seizing more than $300 billion in Russian central bank assets stashed in Western nations and handing them to Ukraine to aid its war effort.
Citing unidentified senior American and European officials, the publication reported that the White House was quietly signaling new support for confiscating the immobilized Russian sovereign assets. The Biden administration, in coordination with G7 governments, is exploring whether it can use its existing authorities or if it should seek congressional action to use the funds, the Times reported.
"There is an opportunity to use something like a syndicated loan or a bond that effectively uses the frozen Russian assets as a surety to give that money to the Ukrainians knowing that we will recoup it when reparations are paid by Russia," said Cameron.
"That may be a better way of doing it. We are aiming for the maximum amount of G7 and EU unity on this but if we cannot get it I think we will have to move ahead with allies that want to take this action," he added.
Newsweek has contacted Russia's foreign ministry for comment by email.
A market analyst told Newsweek last month that such a confiscation of Russian assets could mean that economies in the West will "suffer more losses than gains."
Grzegorz Drozdz, market analyst at Invest.Conotoxia.com, said there is no provision for seizing assets of a foreign state Western states are not clearly at war with.
"Otherwise, the confiscation of Russian assets," including those of sanctioned oligarchs, "would have been carried out long ago to support Ukraine in the ongoing conflict."
"The problem with the confiscation of Russia's frozen assets is a scenario in which it is highly likely that the Western economies will suffer more losses than gains," Drozdz said. "It is worth emphasizing that their strength is largely based on the rule of law and the protection of investors' capital."
Drozdz said that if the assets of Russia's central bank were confiscated, "confidence in the U.S. dollar and euro could be significantly affected, which would have an essential impact on the global competitiveness of Western countries."
Drozdz added that it was notable that according to the Ukraine Support Tracker, the volume of aid for Kyiv fell by 87 percent between August and October 2023 compared to the same period in 2022. "Hence, there seems to be virtually no other option for Ukraine to finance its operation other than issuing high-interest bonds," he said.
Do you have a tip on a world news story that Newsweek should be covering? Do you have a question about the Russia-Ukraine war? Let us know via worldnews@newsweek.com.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Isabel van Brugen is a Newsweek Reporter based in Kuala Lumpur. Her focus is reporting on the Russia-Ukraine war. Isabel ... Read more
To read how Newsweek uses AI as a newsroom tool, Click here.
