Zelenskyy Wants Seized Russian Assets to Rebuild Ukraine
Since 2020, Russian monetary assets in Western banks have been seized. Some of the most powerful and influential economies in the world, the G-7, have considered taking the interest off the Russian assets to fund Ukraine, but Ukrainian President Zelenskyy has pushed for a step further and for the use of all “$300 billion” to be used to rebuild the war-ravaged country.
In late 2023, the UK government asked the Bank of England to consider using frozen Russian assets to finance Ukraine, and UK Chancellor of the Exchequer Jeremy Hunt discussed this with other G-7 finance ministers at the annual IMF conference at Marrakech. The G-7 announced how it would try to use the money “in compliance with applicable laws”.
In contrast with this, at the World Economic Forum in Davos, Switzerland, President Zelenskyy has questioned why all of the seized money shouldn’t be used to rebuild Ukraine, saying to the BBC:
“They destroyed Ukraine…if we have $300bn of Russia assets we have to use them directly to rebuild what has been destroyed by Russian missiles…”
Even with both the UK and US governments unopposed to the idea of using the money to fund the war effort, banks in Europe are hesitant about following through as it could set a dangerous precedent and change the perception of Western banks as untrustworthy.
The US dollar plays a central role in the global economy, and is already effectively weaponised through the use of sanctions to financially restrict actors in breach of international law and trade rules. To set a precedent which can weaponise central banks and to further securitise the global economy, could mean that people would be less likely to invest their money into European banks which could undermine international financial stability.