Frozen RU assets - will Europe ever wake up?

It’s interesting to see various Western politicians warming to the idea of seizing Russian assets, after their exit from office.

See the link to the Economist piece by Rishi Sunak:

https://economist.com/by-invitation/2025/02/28/rishi-sunak-on-why-ukraine-should-get-russias-frozen-assets-not-just-the-interest-on-them

It’s a shame that many of these same politicians did not do more to push the agenda forward when they were in office.

I have obviously written lots on the issue over the past three years but in my mind the obstacles were not really legal or economic but one of political will. Or rather I would argue that their was a failure by our governments to rightly assess the national security risks to Europe from Russia , and the risks of a return of a Trump presidency to those European National security risks, against the legal and economic risks of seizing the assets.

A summary of my many posts on the issue is herein:

https://open.substack.com/pub/timothyash/p/a-q-and-a-on-frozen-russian-assets?r=ynli4&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false

But suffice to say I think that Zoellick, Zyskind and Zelikow in all their work have made the clear cut legal case for confiscation made on the Countermeasures argument.

On the economic argument front, my main points were essentially a) if we don’t use immobilised Russian assets to fund Ukraine then who else pays, likely the Western tax payer, and that will feed the far right narrative in Western democracies, which it kind of has with Trump. Because the West fell back on the lazy use of Western tax payers, rather than Russian taxpayers, it gave Trump the gift of being able to spout lies about the US spending $350 billion supporting Ukraine. And as a result we are where we are now with the Trump administration essentially changing sides on the war in Ukraine and Europe, and Ukraine now left in a disastrous situation. b) And if we underfunded Ukraine, because we relied on the generosity of our taxpayers only, then the costs to the West would be much higher in the long term, as we would have to think of the cost of a Ukrainian defeat or a bad peace for Ukraine. And guess what, that is exactly how things have now ended up, with Europe now talking about huge increases in annual defence spending. An annual $150 billion spend on Ukraine for 1-2 years say, funded by immobilised Russian assets, could have prevented the outcome now which is an increase in defence spending across Europe of likely 1-2% of GDP over the next decade, or an extra €250-250bn per year. So that’s a $300 billion investment (paid for by Russia) to save 10-20 times this over the decade ahead. And all actually funded by Russia. But European politicians had their heads in the sand for the past three years of the Russian invasion - incredible that they essentially did nothing on the immobilised Russian assets front, or really in investing in Europe’s defence. Truly Nero like.

The problem here is that the lawyers and central bankers made the decision on immobilised Russian assets, and not the national security types, and now we are all bearing the costs of that bad decision.

But suddenly, post the Zelensky WH Ambush and the JDV “performance” at the MSC, Europe has finally woken up, but way too late perhaps for Ukraine.

And now Europe is desperately trying to pull things together to try and push for seizing Russian assets before it’s too late - and potentially efforts by Orban and Fico, et al, to block the rolling over of EU legislation due in July keeping the Russian assets immobilised. It’s quite possible then that Russia gets the whole nine yards, or $330 billion in immobilised RU assets back. Macron et al still don’t seem to get it, talking around the Lancaster House summit of keeping assets immobilised to ensure Russia complies with any ceasefire in Ukraine. No, no, no, we need to quickly move to seize and allocate these assets to Ukraine. Now. It’s just a question of political will or common sense.

I have also been quite surprised that the issue of immobilised Russian assets has not been brought into the equation as to how to fund European, as well as Ukrainian defence spending. In the U.K., for example, the Starmer government moved to tap the overseas aid budget to increase defence spending by 0.3% of GDP to the 2.5% of GDP target by 2027. But the U.K. holds around £25 billion in immobilised RU assets. Surely a morally and more effective means to fund the increase in UK defence spending - to “moon shot” this defence spend would have been to tap this Russian money, as it would be equivalent to 1% of GDP, hence covering three years of this defence spend uplift.