Brussels is weighing plans to use 170 billion Euros of Russia’s frozen assets to fund "reparation loans" for Ukraine, a move that could reshape Kyiv’s finances but risk a major clash with Moscow.’
00:00Brussels is weighing plans to use 170 billion euros of Russia's frozen assets to fund reparation loans for Ukraine,
00:08a move that could reshape Kiev's finances, but risk a major clash with Moscow.
00:15Head of Spartan International Dmitry Simes Jr. warns the plan could do more harm than good, pushing both sides further from the negotiating table.
00:24If the Europeans go ahead with this, then that would be the equivalent of economic suicide, right?
00:32Because the majority of Russian thousand assets in Europe are stored in this organization called EuroClear,
00:41which is Europe's largest clearing and settlement organization, right?
00:46So there's about 170 billion, 200 billion dollars worth of Russian assets.
00:53Whereas EuroClear has 40 trillion dollars worth of assets worldwide.
00:59Now, this is where things get interesting, because EuroClear has offices all around the world.
01:05So if they were to freeze Russian assets and illegally confiscate them, then Russia could sue EuroClear and, let's say, Beijing and the United Arab Emirates and Bahrain to recover these stolen assets and maybe get some additional damage.
01:27And if that were to happen, and there's a very good chance that EuroClear would, for example, lose a lawsuit in Hong Kong or lose a lawsuit in Beijing.
01:36In that case, the entire EuroClear system comes crumbling down because that'll give Russia an opportunity not just to recover its assets, but to seize EuroClear assets from all over the world.
01:53And that will be a massive reputational blow to EuroClear.
01:56Dmitry also weighed in on why such action is being considered now.
02:02They don't have the economic ability to keep up a full-blown hybrid proxy war against Russia, because despite 55,000 sanctions, Russian factories produce far more ammunition and drones than all of NATO combined.
02:22And when you look at the economic dynamic, Russian industry is getting stronger, while German and European industry is getting weaker.
02:32And Russia has far more financial room to do deficit spending, to increase government spending, borrowing, whereas Europeans have far higher debt.
02:43Russian officials have repeatedly said that they're operating under the assumption that the West will never return these, quote-unquote, frozen assets.
02:57So by confiscating them and giving them to the Ukrainians, that won't change Russia's political calculus, because no matter what Russia is committed to victory in Ukraine, it views this as an existential security issue.
03:12There's not going to be any compromise on that.
03:15What it will do is that it will give Russia even less incentive to make any sort of compromises or concessions to Ukraine and its Western puppet masters.
03:25Because theoretically, what the Ukrainians and Western puppet masters could have done is come and say that, look, we want a big peace settlement, and as part of this larger peace settlement, we're willing to return these frozen assets.
03:40And that could have been, you know, a sweetener to any potential deal.
03:46But basically, if the Europeans do that, they'll give rid of the few leverage that they still have left, and they'll once again show Russia that these people don't play by the rules, that they're unreliable, and that they need to be knocked out.
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