Lagarde - needs to be on the right side of history

Finally

Interesting to hear Christine Lagarde argue that seizing Russian assets needs to be legal.

That is fine but Lagarde needs to tell us all, if frozen Russian assets are not used, how is the West going to fund Ukraine.

As is, with $61 billion in US Funding stuck in Congress, and with a Trump presidency likely to pull the plug on Ukraine financing next year, the IMF EFF financing plan for Ukraine - with a $122-140 billion financing gap supposedly to be filled by the West - does not add up. Will Europe step up to guarantee to cover the US shortfall? I just cannot see that. In an age of Trump, and populism Western financing assurances mean as much as the paper that the Budapest memorandum was written on. Hard cash matters, as is the $300 billion off of immobilised Russian central bank assets in Western jurisdictions.

And actually, its not just about the budget/BOP gap as identified by the IMF, its about the wider financing envelop, including military support, which is $100 billion a year on the current run rate. The US has been providing half of that. So again, is Lagarde willing to write another cheque for $50 billion, pa (multiples of the four year EUR50bn EU financing agreed in December) for Ukraine to make up for the US shortfall?

And what are the optics of that? Western tax payers writing cheques to protect Russian assets and Russian taxpayers money. The irony of our Western leaders quick to spend their own tax payers money, but not those of Russia. That should be an absolute scandal in our democracies.

And please Madame Lagarde, please tell us where the rule of law in Europe will be if Russia wins this war?

What will be the economic cost, and the impact on confidence in the Euro?

I would say a Russian victory means Russian tanks moving West, a massive increase in defence spending in NATO - around 1% pa more, or then $100 billion more per year. It means also tens of millions of Ukrainian moving West. That will create economic, social and political problems in Europe - the further rise of populism and racism.

And will the likes of Orban exploit a defeat for their own nationalist agenda, Greater Hungary, might mean more wars within the EU?

On the issue of the legality, in the US its an Executive Order decision, in Europe, it requires legislative action. So pass the required laws! Politicians make laws, so in the end all of this is a political decision, not a matter of law.

And don't give me all the bull about rule of law in the West - where was the rule of law when the West accepted the $300bn plus in the first place, from a clearly Klepocratic regime, where there is no rule of law? And all the oligarch dirty money. The West facilitates corruption in Ukraine, Russia, and in Emerging Markets by its double standards when it comes to rule of law.

So the ECB computer might say no, but no is not good enough, Lagarde has to tell us how we are going to fund Ukraine's victory, and deal with its potential defeat if we don’t stump up the cash.

Usual head in the sand stuff from our leaders.

It’s frightening really that most of the Western decision makers who got Russia so wrong over the last decade are still the ones calling the shots now. Supporting Ukraine should be the number one national security imperative for the West now - needs must, and we need to think outside the box of Queensbury rules to win this. Putin plays dirty, and we need just to be cleverer. That means doing whatever it takes to ensure a Ukrainian victory.