Tap frozen Russian assets to aid Kyiv — Yellen; Visegrad Four meeting highlights divisions

28 Feb 2024

US Treasury Secretary Janet Yellen called on the world’s largest advanced economies to find a way to ‘unlock the value’ of immobilised Russian assets to help bolster Ukraine’s defence against Russia’s invasion and for long-term reconstruction after the war.

Polish premier Donald Tusk admonished his Slovak counterpart, Robert Fico, at a high-level meeting in Prague over his criticism of military aid to Ukraine, laying bare European divisions over the region’s backing for Kyiv.

Ukrainian President Volodymyr Zelensky arrived in Saudi Arabia for talks with Crown Prince Mohammed bin Salman. “Topic number one is the Peace Formula,” Zelensky said on Tuesday in a post on social media platform X, referring to an initiative that requires Russian forces to withdraw from all Ukrainian territory.

European leaders rejected the prospect of sending combat troops to Ukraine, undercutting French President Emmanuel Macron’s promise to do whatever it takes to keep Russia from winning the war.

Yellen sees moral case to use Russian assets to aid Ukraine

US Treasury Secretary Janet Yellen called on the world’s largest advanced economies to find a way to “unlock the value” of immobilised Russian assets to help bolster Ukraine’s defence against Russia’s invasion and for long-term reconstruction after the war.

“There is a strong international law, economic and moral case for moving forward,” Yellen said on Tuesday in São Paulo in remarks before meeting with counterparts from the world’s top economies. “The G7 should work together to explore a number of approaches that have been suggested.”

Her comments come as the Group of Seven nations are debating what to do with sovereign assets that were frozen at the outbreak of the invasion, with Ukraine’s financing needs remaining persistently high and the war now in its third year with no sign of abating.

The European Union, G7 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. The parties all agree that those funds should remain off-limits to Russia unless it agrees to assist in Ukraine’s reconstruction, but they’re at odds over the legality of seizing the assets outright.

Yellen said that beyond simply seizing the assets, other ideas include using them as collateral to borrow from global markets.

Unlocking the assets to help Ukraine “would be a decisive response to Russia’s unprecedented threat to global stability”, Yellen said. “It would make clear that Russia cannot win by prolonging the war and would incentivise it to come to the table to negotiate a just peace with Ukraine.”

Responding to Yellen’s comments at a press conference in São Paulo on Tuesday, Russian Finance Minister Anton Siluanov said the US plan was “destructive” because it made countries’ reserves susceptible to political decisions. He said Russia could respond “because we have frozen on our side a sizeable amount of foreign assets”.

In an interview at the G20, Siluanov also said that the rhetoric about asset freezes was undermining “trust in the reserve currencies.”

Discussions on using Russian assets have intensified as President Vladimir Putin’s forces gain momentum on the battlefield. As Republicans in Washington continue to set hurdles for new aid for Kyiv, the Biden administration is keen to offer Ukraine another important signal of its support.

The US and UK have been pushing G7 allies to seize the central bank assets outright, but the group’s European members, especially France and Germany, are currently opposed to the move over legal concerns and worries that it could damage the stability of the euro as well as set a dangerous precedent.

Poland’s Tusk scolds Slovak leader over pro-Russian rhetoric

Poland’s premier admonished his Slovak counterpart at a high-level meeting in Prague over his criticism of military aid to Ukraine, laying bare European divisions over the region’s backing for Kyiv.

Prime Minister Robert Fico of Slovakia, who returned to office last year on a campaign to halt weapon shipments to Kyiv, has intensified his condemnation of arms deliveries to neighbouring Ukraine, putting him in line with his Hungarian counterpart, Viktor Orbán.

At a meeting of the so-called Visegrad Four — Poland, the Czech Republic, Hungary and Slovakia — in Prague on Tuesday, Fico said that sending military equipment would only prolong the two-year war and that the European Union should instead promote negotiations to end the conflict.

“Guess, Robert, where would be the border between Russia and Ukraine without our assistance,” Polish Prime Minister Donald Tusk retorted in English at a press conference of the four leaders. “I think it’s a much more interesting question.”

The tense moment undermined initial efforts by the leaders — including Orbán and Czech premier Petr Fiala — to make a show of harmony, touting common positions on the bloc’s agriculture or migration policies.

But the respite didn’t last. While Tusk and Fiala are ardent backers of Ukraine in its war against Russia, Orbán and Fico have criticised sanctions targeting the Kremlin.

Zelensky in Riyadh for talks on path to ending war

Ukrainian President Volodymyr Zelensky arrived in Saudi Arabia for talks with Crown Prince Mohammed bin Salman, one of the few world leaders to have met Vladimir Putin since Russia’s invasion in 2022.

“Topic number one is the Peace Formula,” Zelensky said on Tuesday in a post on social media platform X, referring to an initiative that requires Russian forces to withdraw from all Ukrainian territory.

Ukraine has been rallying global leaders to support its proposed peace deal, and Zelensky last month unveiled plans for a high-level meeting in Switzerland to move forward with the formula. Security officials from more than 80 nations met in Davos in January to discuss the blueprint, but the meeting ended with no clear path forward.

Zelensky said he was counting on the support of Salman, Saudi Arabia’s de-facto ruler, who is trying to position the kingdom as the leading diplomatic power in the Middle East, and a conflict mediator.

Other topics he plans to discuss with MBS, as the crown prince is known, include help with brokering prisoner swaps and the return of people illegally deported to Russia. They will also talk about Saudi Arabia’s potential participation in the future reconstruction of Ukraine.

Macron’s ambiguity on Ukraine backfires as allies baulk at troops

European leaders rejected the prospect of sending combat troops to Ukraine, undercutting Macron’s promise to do whatever it takes to keep Russia from winning the war.

At an informal gathering of European leaders in Paris on Monday, Macron proposed sending more personnel to Ukraine in limited areas, according to people familiar with the discussions, and refused to rule out putting boots on the ground.

“There’s currently no consensus to send ground troops in an official and open way,” he said. “But in terms of dynamics, nothing can be ruled out.”

During the summit, there was no discussion about sending European soldiers directly into the battlefield, but Macron’s comments helped foster strategic ambiguity, said the people, who spoke on the condition of anonymity. Such a move, however, would directly put Nato in a fight with Russia.

Macron called the gathering in a show of support for Ukraine at a delicate moment in the war, and to underscore Western determination to help it win. Following the meeting, he said: “We will do everything we can to prevent Russia from winning the war.”

Asked about Nato troops being sent to Ukraine, Kremlin spokesperson Dmitry Peskov said it would mean the “inevitability” of conflict, and Western countries should evaluate if such a move “corresponds with their interests”, according to the Interfax news service.

Macron told reporters that the European Union leaders present agreed to take action in five areas, including demining operations, supporting Ukraine on its border with Belarus with non-military forces, cyber defence and the co-production of weapons in Ukraine, as well as defending countries like Moldova, which are threatened by Russia’s offensive in Ukraine.

Some Nato allies already quietly send some advisers and trainers to help Ukrainian forces handle Western equipment, but sending more coordinated groups of personnel to aid in Ukraine’s defence would amount to a major step by allies.

Those groups may need to be defended, “which would then justify some elements of deployment”, Macron said. That could create added risk where allies may have to fire directly on Russian forces to protect their personnel. Other major training programmes by European and other allies so far have taken place outside Ukraine.

While Ukraine is in dire need of more soldiers to help it fend off Russian advances, sending allied troops to directly fight on Ukraine’s behalf is still vehemently rejected by allies who fear being roped into a wider war with a nuclear power. Nato says it has no plans to send troops to Ukraine.

“What was agreed among us from the start still applies for the future, namely that there will be no ground troops, no soldiers on Ukrainian territory sent there by European nations or Nato nations,” German Chancellor Olaf Scholz told reporters on Tuesday. “And that soldiers deployed by our countries don’t actively take part themselves in the war.”

Russia imprisons co-chair of Nobel Prize-winning rights group

The co-chair of Memorial, a Russian human rights group awarded the Nobel Peace Prize and banned by the Kremlin, was sentenced to 2½ years in prison for criticising Putin’s invasion of Ukraine.

Oleg Orlov, who was convicted of “discrediting” Russia’s armed forces, denounced the charges against him in a final speech before a Moscow court ordered him jailed on Tuesday.

“I am being tried for a newspaper article in which I called the political regime that’s established in Russia totalitarian and fascist,” Orlov (70) said. “Some of my friends thought I was exaggerating things too much. But now it’s absolutely clear that I wasn’t exaggerating at all.”

The Kremlin has waged an unprecedented crackdown on critics, driving them into exile or prison, since Putin ordered Russian troops into Ukraine in February 2022.

Memorial was awarded the Nobel Peace Prize in October 2022, jointly with rights groups from Ukraine and Belarus. Founded by Soviet-era dissidents including Nobel laureate Andrei Sakharov, the group catalogued political repression ranging from Soviet dictator Josef Stalin’s mass purges to the persecution of dissent under Putin.

Russia ordered the organisation to shut down in December 2021 for failing to identify itself as a “foreign agent” under a strict Russian law.

Orlov initially was fined 150,000 roubles ($1,630) by a district court last year but a retrial was ordered after he appealed. Prosecutors sought an almost three-year sentence, accusing him of hatred toward Russian military personnel. DM

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World

Yellen sees moral case to use Russian assets to aid Ukraine

Poland’s Tusk scolds Slovak leader over pro-Russian rhetoric

Zelensky in Riyadh for talks on path to ending war

Macron’s ambiguity on Ukraine backfires as allies baulk at troops

Russia imprisons co-chair of Nobel Prize-winning rights group