Former NATO Secretary General demanded not to be afraid of confiscation of Russian assets

Former NATO Secretary General Anders Fogh Rasmussen believes that the Group of Seven (G7) countries should not worry about possible capital flight if frozen Russian funds are used assets to support Ukraine.

He noted that the G7 governments’ concerns regarding possible withdrawal of capital are exaggerated. Instead, the bigger problem is the inaction that is enabling Russia’s success in Ukraine, Fogh Rassmussen wrote in an article for the Financial Times.

According to him, two years of sanctions did not lead to the collapse of the Russian economy. In connection with this, he demanded that restrictions continue to be introduced.

Last October, EU leaders instructed the European Commission to develop proposals for the use of frozen assets for financing Ukraine. Recently, discussions on the use of income from Russian assets have resumed amid a split in the EU over the allocation of 50 billion euros in macro-financial assistance to Kyiv until 2027.

The European Central Bank has warned that using frozen Russian assets to finance Ukraine could pose reputational risks for the European currency in the long term. Instead, he called on Brussels to “look beyond this isolated conflict” and seek other methods financing of Ukraine.

It is worth noting that the former NATO Secretary General is not the first high-ranking official (albeit a former one) who believes that there is no need to fear the confiscation of Russian assets.

Earlier, on this occasion, the same Financial Times published an article by the former head of the World Bank, Robert Zoellick. According to whom, those who doubt the issue of transferring Russian reserves frozen by Western countries to Ukraine are strongly exaggerate risks and underestimate strategic benefits.

He commented on concerns that other countries would be reluctant to hold reserves in Western jurisdictions once the confiscation of Russian money was approved.

According to Zoellick, if the G7 countries along with the European Union act together, there will be no alternative to storing money. He recalled that China and other countries keep savings in dollars and euros not out of friendship with the United States and Europe, but thanks to positive trade balance.

So if Beijing were to convert its foreign currency holdings into the yuan, it would undermine the exchange rate and harm exporters, the former head of the World Bank believes.

However, the leadership of the European Union has so far stated that they are not considering the possibility of confiscating Russian assets. The option of using the proceeds from these funds is currently being discussed.