12/23/2023
The Biden administration appears to have broken the impasse it found itself in after congressional Republicans blocked a military and financial aid package for Ukraine. The idea is to finance Ukraine’s war with Russia at its own expense, that is, by using Russian gold and foreign exchange reserves located in the West, frozen at the beginning of the invasion, which is about 300 billion US dollars.
The Europeans are also not sitting idly by and have already drawn a path for themselves that will bypass Orban’s veto, remembering that 80 billion euros have been lying idle in the EU stabilization fund for many years now. This money can be transferred to Ukrainians without the consent of Hungary.
Read about how Ukraine’s allies are overcoming obstacles to providing assistance in the material from OBOZ.UA.
What is the US aiming for?
The main thing that the United States wants today is to somehow resolve the issue of financing Ukraine, understanding the consequences of our defeat both for ourselves and the world. At the same time, you need an option that you can also sell to your voters.
The Biden administration has begun urgent discussions with partners on using $300 billion in Russian assets hidden in Western countries to help Ukraine confront Russia.
From day one, Ukraine demanded the confiscation of these funds, but the United States and its allies argued that there were no legal mechanisms for such a decision. The West previously believed that frozen assets could be used as leverage to force Russia to the negotiating table, but Putin showed no interest. Now, finally, in Washington they say that a legal mechanism has been invented that makes it possible to take away frozen assets, and therefore future confiscation is permitted by international law.
There are already ways in which Ukraine will receive these funds. Assets can be sent in tranches, for example through the World Bank or the European Bank for Reconstruction and Development. This is seen as an “advance” towards compensation to Ukraine, which Russia must ultimately pay under international law.
This step changes everything
The position of Republicans in Congress this time coincides with the Biden administration. Of course, no one refused to defeat the enemy at his own expense. There is a certain concept of how to solve this problem. Thus, a bipartisan bill has already been registered, which is very important, given the current confrontation between Democrats and Republicans. The document has already passed a committee in Congress and is expected to vote very soon.
At the same time, the US seems to have come to the conclusion that even if Congress eventually reaches an agreement on a $60 billion aid package, the situation at the front suggests that Ukraine needs financial and military assistance on a much larger scale if The West really wants to defeat Russia.
“This amount of money (300 billion) that we’re talking about is just a game changer,” said Philip Zelikow, a State Department official in both Bush administrations and a senior fellow at Stanford University. The fight for this money that is going on is in fact, to a certain extent, the main campaign of the war.”
What can interfere
The US and especially the EU are still worried about the possible consequences for themselves if the confiscation and transfer of Russian money does become a reality. But the assets of central banks are protected by international standards. American officials have expressed concerns about how the transfer of Russian assets will affect the desire of other countries to maintain their funds in the Federal Reserve System in dollars.
It could also send a signal to Saudi Arabia and China that sovereign assets in euros or dollars may not always be safe – and begin to withdraw their billions. Europe is also afraid of possible retaliatory measures, because in comparison with them, the United States has only a very small amount of assets of the Russian Central Bank. Therefore, France, Germany and Italy remain extremely cautious.
But proponents of the idea believe these concerns are exaggerated. British Foreign Secretary David Cameron rejected the idea that this would reduce foreign investment.
We hope that the Biden administration will put pressure on France, Germany, Italy and other countries, showing that it is truly financially beneficial for them to provide Ukraine with the means to win and calm the situation on the continent, or continue to wait for Putin to resume his military potential and move further to the West.
According to the plan, the strategy for confiscation and transfer of funds should be ready by the second anniversary of the Russian full-scale invasion – February 24, 2024.
By the way, there is a precedent for such a step – after Iraq’s invasion of Kuwait in 1990, $50 billion of Iraqi funds were confiscated and transferred through the UN to compensate the victims.
Orban can be bypassed
For its part, Europe is also solving its problems by providing assistance to Ukraine.
After Hungarian Prime Minister Viktor Orban once again made it clear that he will continue to block European aid to Ukraine, the EU is actively working to find a way around this obstacle. Yes, the EU can bypass Hungary’s veto and help Ukraine with money from the stabilization fund. The European Stability Mechanism was created in 2012 as a fund to help eurozone countries that faced serious financial problems. The fund contains more than 80 billion euros, and in addition, it has approximately 620 billion euros of “before issue” capital guaranteed by the countries of the union. It is the redirection of billions, most of them lying idle in the European Stability Mechanism, that could become a “Plan B” in helping Ukraine.
Another way to bypass Hungary’s veto is that EU countries can enter into separate agreements with Ukraine on a bilateral basis to allocate financial assistance.
Russia is preparing for a big war – so help is very necessary
“The main thing is that today the European Union and the United States have a clear understanding that financing Ukraine to continue its fight against Russian aggression meets their own interests,” this opinion was expressed by a Ukrainian diplomat, Ambassador of Ukraine to Croatia, in an exclusive comment to OBOZ.UA and Bosnia and Herzegovina in 2010-2017 Alexander Levchenko.
“Of course, it’s very annoying that the issue of Ukrainian assistance depends on internal contradictions both in the States and the European Union. And yet there are certain hopes that after the New Year holidays a compromise is still possible. It’s good that Europeans and Americans are discussing how it’s all the same to help Ukraine. Especially considering the fact that at his last press conference, Russian President Vladimir Putin clearly outlined further steps after the next presidential reassignment. He will indeed continue the war against Ukraine, directly called Moldova next in this series and actually threatened NATO is at war. Russia is fully preparing for the Great War – this is already clear. Therefore, assistance to Ukraine today from the EU and the United States is, first of all, help to themselves. After all, their current savings in allocating funding for the Ukrainian fight will cost much more over time,” – notes Alexander Levchenko.
Where there is a will, there is a way. Ukraine can’t and won’t be let down. No matter how dark the clouds now are, they will be blown away again and the rays of hope will once more shine on this brave land.
Amen!!!