EU should seize Russian reserves to rebuild Ukraine, top diplomat says

EU should seize Russian reserves to rebuild Ukraine, top diplomat says
# 09 May 2022 09:50 (UTC +04:00)

EU capitals should consider seizing frozen Russian foreign exchange reserves to help pay for the cost of rebuilding Ukraine after the war, the bloc’s top diplomat has said, as the west debates how to force Moscow to pay for some of the damage the conflict has caused, APA reports citing Financial Times.

Josep Borrell, the EU’s high representative for foreign policy, said the US had taken control of billions of dollars worth of assets belonging to the Afghan central bank, in part to potentially compensate victims of terrorism as well as for humanitarian aid for the country, and that it would be logical to consider similar steps with Russia’s reserves.

“I would be very much in favor because it is full of logic,” said Borrell in an interview with the Financial Times. “We have the money in our pockets, and someone has to explain to me why it is good for the Afghan money and not good for the Russian money.”

Early in the war, the EU and its allies froze hundreds of billions of dollars worth of foreign exchange reserves parked in accounts by the Russian central bank. Russia said in March that the central bank sanctions had frozen about $300bn out of its gold and forex reserves, which total more than $600bn.

EU officials have examined the question of whether Russia’s reserves could somehow be deployed in the Ukraine reconstruction effort, but Brussels has not come forward with any policy proposals on the topic. Borrell raised the idea as one of several ways in which Russia could be made to contribute.

Asked last month whether the money could be seized and used to rebuild Ukraine, US Treasury secretary Janet Yellen said it was not something to be done lightly, that it should only be done in coordination with allies, and that it might require legislation in the US.

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