A simple solution that responds to all these concerns is available.
To avoid the risk that the assets of the Central Bank of Russia did not decrease and do not return to the hands of the Kremlin in July, Europe must use the argument of countermeasures and put the assets out of the reach of Moscow. This can be done by transferring them to a new vehicle set up in Belgium, with the surveillance of EU governance, and by placing the legal title of assets in a trust for the benefit of Ukraine. Above all, the assets would not be transferred to Ukraine but would be used to generate a constant flow of annuity income to support its needs in defense and continuous financing.
In the current state of things, Ukraine does not have the capacity to absorb such a large sum of money in one time, but it needs a reliable and lasting income. This means that the requirement of reversibility of the argument of countermeasures would be satisfied, because the potential of the property of returning assets in Russia would remain. And, by the way, if the vehicle was based in Brussels, Belgian tax revenues would also be protected.
The vast majority of the assets of the Russian central bank which existed in February 2022 were obligations which have since matured and amount to a huge lot of liquidity which gain very little interest. Once transferred to the new vehicle, these assets could be actively managed, win a significantly higher income and provide a cash flow annuity to support Ukraine, which reduces the need for Western allies to dig into the reduction in taxpayers’ funds in order to maintain Ukraine afloat.
And as the ceasefire and the expected peace agreement slowly emerge, these assets could constitute the basis of the creation of a Ukrainian reconstruction bank-a based in Germany Kreditanstalt für Wiederaufbauwhich was set up to finance the reconstruction of the country after the Second World War.
While the debates in Brussels and member countries continue, the inertia of the block and the lack of vision mean more and more that it risks the defeat of the jaws of victory. And with the risk posed by the deadline for renewing imminent immobilization in July, the clock turns. However, there is a clear solution to all excuses – what really lacks is the political will to act.
And this must change before the traming of the EU leads to the disaster.
Politices
