WIREDGOV

EXPERT COMMENT

The $300 billion of immobilized assets can only partly address the cost of Ukraine’s survival and reconstruction. There should be no qualms about confiscating it.

It seems odd, considering the scale of destruction caused by Russia’s invasion of Ukraine, that seizing Russian money immobilized in Western clearing houses is as hotly debated as it is.

The costs of Ukrainian reconstruction are difficult to agree. $1 trillion is sometimes stated. A more conservative estimate would be around half that – $500 billion.

But before reconstruction can even begin, Ukraine needs to finance its war effort – costing around $50 billion per year – and maintain its day-to-day economy.

In other words, Russian state assets, if repurposed, could cover the costs of five years of war, or three-fifths of the conservatively estimated reconstruction costs. Either way, these assets would only make a modest-sized dent in the catastrophic overall costs created by Vladimir Putin’s invasion of Ukraine.

Seen in these terms, the EU’s proposal to confiscate and repurpose only the $3-5 billion in interest generated by the $300 billion every year, cannot be considered a meaningful amount. It is also hard to understand the legal sophistry behind claiming the $300 billion is sovereign and ‘untouchable’, but interest accrued can be considered fair game. Russia, surely, holds the deeds to both the capital sum and its interest.

Click here to continue reading the full version of this Expert Comment on the Chatham House website.