British foreign secretary proposes to loan all frozen Russian assets in UK to Ukraine
The plan could provide funds for arms & budgets if US aid stalls, though it may be "more radical than proposals discussed in the European Union," the Guardian reports.
UK Foreign Secretary David Cameron said the British government is prepared to loan Ukraine all frozen Russian central bank assets held in the UK, the Guardian reported on 6 March.
According to Cameron, it’s possible to use a loan that uses the frozen Russian assets for Ukrainians, however, “knowing that we will recoup it when Russia pays reparations.”
The Guardian reported that this plan is more radical than proposals from the European Union to provide Ukraine only the windfall profits from Russian central bank assets held by the West, estimated at $4 billion annually.
Cameron said that his approach would not undermine the reputation of the City of London and likely has political support in the US, though not the EU.
The plan could provide Ukraine funds to purchase armaments and cover budget deficits if US Congress blocks further aid extensions.
“We are aiming for the maximum amount of G7 and EU unity on this, but if we cannot get it, I think we will have to move ahead with allies that want to take this action,” according to the UK Foreign Secretary.
The G7 has debated for over a year whether frozen Russian central bank assets could be seized without undermining faith in the international financial system. The EU estimates around €260 billion ($282 billion) in Central Bank of Russia assets are immobilized across G7 partners, the EU, and Australia. Belgium housing around €190 billion ($206 billion) and is reluctant to follow Cameron’s proposal due to pending legal cases.
The US Treasury has “warmed to the idea of a bond” after initial reluctance to seize sovereign assets. Official figures are undisclosed, but the US is estimated to hold $40-60 billion in Russian assets, while the UK controls closer to £25 billion ($31 billion).
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