Frozen Russian assets

Spelling it out, someone has to

It’s more than a year since I first called for the $400bn in frozen Russian assets to be used for Ukrainian reconstruction. More than a year on though and it’s clear to me that the lawyers and bean counters in Western governments are blocking this. These are the people who tend to hide behind “the computer says no” kind of approach. These are not the people who understand the big picture or who get and understand the national security imperative. And typically these are the same people who totally got Russia wrong for so long and which is why we now face the clear and present danger from Russia as it is. The point is that these are not the people who should be making the decisions.

So let me know spell all this out in a kind of a fools guide to funding Ukraine’s war efforts and recover.

First point, what happens if we fail to adequately fund Ukraine’s war effort and recovery?

Simply put Russia expands to NATO’s borders and threatens further expansion. NATO has to massively increase defence spending and hold it there for many years to come. Meanwhile, tens of millions of Ukrainians will move West, causing huge social, economic and political upheaval in Europe. The costs to the West will be hundreds if not trillions of dollars in extra long term spending, but also risks to political stability. Our systems are under threat here.

Second point, will the private sector pay for Ukrainian recovery?

Absolutely not, and the London Recovery Conference and all the Ukraine recovery conferences that promise this are just being disingenuous and it’s a case of our politicians trying to pass the buck because they don’t really want to make the difficult but right choices. The private sector will not pay for a variety of reason - insecurity, the fact Ukraine is still in default, but essentially because Ukraine’s defence and recovery is and should be a Western public good. And a classic one at that.

Third, will the Western taxpayer pay?

Well, the costs are huge - perhaps $500bn to $1 trillion. And I would argue events this week in the US Congress with McCarthy’s ousting and in Slovakia with Fico’s victory in elections, suggests that in the midst of a global cost of living crisis, Western tax payers simply don’t have the appetite to pay. And, if we try and make them pay, we risk more populist backlashes which threaten the entire system of Western liberal market democracy - we play to Trump in 24’.

So reading the above, we have to make sure we fund Ukraine’s victory and reconstruction be we cannot afford it. But there is $400bn in frozen Russian assets we can use just lying about in Western bank accounts. They can be used - see arguments below.

The extraordinary thing here though is that our politicians seem to think it is ok to charge Western tax payers for Ukrainian victory and recovery but give all the Russian money back. I mean how does that work? The aggressor wins, it pays to be the aggressor? That surely again risks a political backlash in the West if this is ever allowed to happen.

So the lawyers and bean counters say it cannot be done. Take it out of their hands. Tell them it has to be done, make it happen, and change laws if need be to make it happen. This is a huge national security priority. Just get it done!

See posts linked at end: