House Republicans weigh up seizing frozen Russian assets; Kremlin victory will affect US, warns Latvian PM

15 Mar 2024

House Republicans were ramping up work on their own Ukraine package, and the idea of seizing Russian assets to pay for billions in war aid was gaining traction within the party.

Latvian Prime Minister Evika Silina said a failure to support Ukraine and a Russian victory in the war would have a global impact, including on the US.

Shipments of diesel from Russian ports have fallen in the weeks since drone strikes began on the nation’s oil refineries.

House Republicans look to frozen Russian assets to fund Ukraine

House Republicans were ramping up work on their own Ukraine package, and the idea of seizing Russian assets to pay for billions in war aid was gaining traction within the party.

The Republicans and the Democrats for months have been locked in a stalemate over $60-billion in funding for Ukraine, which has also tied up funding for Israel and Taiwan.

House Speaker Mike Johnson continues to insist the Biden administration take action to secure the US-Mexico border before he’ll offer a Ukraine Bill in the House. Still, he’s publicly discussed the importance of preventing Russia from taking over Ukraine.

“I understand the timetable and the urgency of the funding,” he told reporters at the annual House GOP retreat in West Virginia this week.

House Foreign Affairs Committee Chairman Michael McCaul of Texas said on Thursday he was working “on a path forward” for Ukraine aid. One way to pay for it that’s increasingly popular among Republicans, he said, was seizing about $300-billion in frozen Russian sovereign assets to pay for it. Republican French Hill of Arkansas said Russian asset seizure “must” be part of the Bill.

McCaul said he had also talked to colleagues about providing the Ukrainian government with loans instead of grant payments to reduce costs to taxpayers and draw more GOP support.

Any such package would need Democratic support to pass the House, given the number of ultraconservative Republicans who do not want to further fund Ukraine.

So far, House Democrats have insisted that the House simply pass the Senate’s bill, arguing there is no time to try a different approach with Ukraine running out of ammunition.

As the situation in Ukraine becomes more dire, there are calls within Europe to use frozen Russian assets to pay for Ukraine’s defence and reconstruction, but Russia has warned against that.

The European Union, the Group of Seven nations and Australia have frozen about €260-billion in the form of securities and cash, with more than two-thirds of that immobilised in the EU.

Last month, Russian Finance Minister Anton Siluanov said Moscow would give a “symmetrical” response to any actions by the US and its allies that target its assets.

“We also have no fewer frozen” assets than the West holds, Siluanov said in an interview with the state-run RIA Novosti news service.

A Russian victory in Ukraine would affect the US, says Latvian premier

Latvian Prime Minister Evika Silina said a failure to support Ukraine and a Russian victory in the conflict would have a global impact, including on the US.

“If Russia wins, those consequences will affect all the world — also Washington, also the United States — not just Europe,” Silina said in an interview in Washington with Bloomberg Television on Thursday.

Latvia, alongside Baltic neighbours Lithuania and Estonia, has been among the most vocal critics of Russia’s two-year invasion of Ukraine, lobbying for ever-tougher sanctions against Moscow and weapons deliveries for Kyiv.

Russia’s diesel exports fall as drones hit oil refineries

Shipments of diesel from Russian ports have fallen in the weeks since drone strikes began on the nation’s oil refineries.

While there is evidence that the strikes are affecting the plants’ output, it will take time for any damage to refineries to fully feed into the country’s exports. Other factors, such as bad weather and routine maintenance, can also affect flows.

Russia typically exports about a million barrels a day of diesel-type fuel, making it one of the world’s top suppliers. Traders are closely monitoring the shipments as any sharp drop would exacerbate an already tight global supply picture.

So far, diesel markets have remained relatively tranquil in response to the latest strikes. The fuel’s premium over crude stood at about $25 a barrel on Thursday afternoon in London, according to ICE Futures Europe data. That’s lower than where it was in late January.

Russia’s frozen assets should be seized, says Lithuanian banker

The Russian reserve assets frozen after Vladimir Putin invaded Ukraine should be seized to help fund the defence and reconstruction of that nation, according to Gediminas Simkus, who heads Lithuania’s central bank.

“We know clearly who the aggressor is,” Simkus — who’s also a member of the European Central Bank Governing Council — told reporters on Thursday in Vilnius. “I don’t see any reason why assets of the aggressor shouldn’t be used for a country under attack.”

The remarks appear to be at odds with the position of ECB President Christine Lagarde, who fears the outright seizure of Russian assets — thought to total $280- billion — would risk harming the euro’s status as a reserve currency.

While the US backs the idea, politicians in Europe are concerned about the legality of the move and would rather channel cash generated by the assets to Kyiv.

Pentagon lists priorities to arm Ukraine, replenish stockpile

The Biden administration has underscored to legislators its $6.5-billion in priorities to replenish US arms stockpiles, replacing weapons already sent to Ukraine and allowing for more to be provided, according to a Defense Department document sent to Capitol Hill.

The replenishment, which involves everything from 155mm artillery shells and air-launched anti-radar missiles to night-vision headgear, has become stymied as legislation that would provide assistance to Ukraine in its struggle against Russia’s invasion remains entangled in Congress.

House Speaker Mike Johnson has refused to act on a $95-billion package passed by the Senate that includes aid for Ukraine, Taiwan and Israel in its war against Hamas without tying it to a Republican version of new legislation on US immigration policy.

The Pentagon has about $10-billion in immediate replenishment needs, officials have said.

Nato chief urges allies to ramp up military supplies to Ukraine

Nato countries must boost their military aid to Ukraine, the head of the alliance urged, as Kyiv’s forces struggle to hold the line against a fresh Russian advance.

“The Ukrainians are not running out of courage, they are running out of ammunition,” Nato Secretary-General Jens Stoltenberg told reporters in Brussels on Thursday. “Together we have the capacity to provide Ukraine with what it needs, now we need to show the political will to do so.”

“All allies need to dig deep and deliver quickly, every day of delay has real consequences on the battlefield in Ukraine,” Stoltenberg added as he presented the alliance’s annual report. He said that two-thirds of member nations would meet the bloc’s overall spending target this year.

BlackRock’s Hildebrand says investors target $15bn to rebuild Ukraine

A programme for private investors to help rebuild Ukraine is aiming to provide $15-billion of funding with support from state bodies and capital markets.

The Ukraine Development Fund is on track to secure at least $500-million from countries, development banks and other grant providers, along with $2-billion from private investors, according to Philipp Hildebrand, vice-chair of BlackRock, who is among the financiers leading the discussions.

That could bring together a consortium of equity and debt investors who could finance at least $15-billion of reconstruction work in Ukraine, he said.

The total bill to rebuild Ukraine following Russia’s invasion was estimated at nearly $500-billion by the World Bank and others last month.

Hildebrand said the new fund represents a “pretty sizeable chunk” of the $80-billion of work that could be financed by the private sector, as estimated by the International Finance Corporation. Ukraine’s government and finance firms have spent 18 months in talks about encouraging private investment. DM

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