Europe has left Ukraine living on borrowed time |
Russia started the war on Ukraine, so Russia should pay for the damage it has wrought. Such was Volodymyr Zelensky’s forceful message to European leaders last night as he pleaded for a ‘reparations loan’ backed by the €190 billion (£167 billion) of Russian Central Bank capital frozen in a Belgian clearing bank since Putin’s full-scale invasion. ‘Just as authorities confiscate money from drug traffickers and seize weapons from terrorists, Russian assets must be used to defend against Russian aggression and rebuild what was destroyed by Russian attacks,’ Zelensky told his European allies. ‘It’s moral. It’s fair. It’s legal.’ But after negotiations that went late into the night, Europe ultimately shied away from grabbing Russia’s money. Instead, the continent’s leaders have agreed to collectively raise a smaller loan of €90 billion (£79 billion) to keep Ukraine’s war effort afloat.
The Kremlin has its own ways to retaliate if Europe seizes its sovereign capital
Talks failed after several key allies disagreed about the ‘legal’ part of Zelensky’s plea. Russia is not in a state of war with Europe or any other country other than Ukraine. There is no international court, nor any clear legal mechanism, for confiscating the €290 billion (£250 billion) in sovereign assets that the Kremlin has deposited worldwide (including some £24 billion in the UK, €17 billion (£15 billion) in France and $5 billion (£3.7 billion) in the US). The prospect of forcing Russia to pay war reparations is non-existent until the Kremlin is actually defeated – which at the moment appears unlikely. So when the war eventually ends, Moscow will sue to have its money returned – and under Belgian law, it would win. That, argued Belgium’s Prime Minister Bart De Wever, would leave his country liable for the whole sum unless European leaders agreed to mutualise the debt – in other words, to guarantee the reparations loan with their own money. They declined to do so, instead compromising on a smaller collective........