Ukraine will be able to repay part of its public debt with the help of Russian assets frozen in the West after the sanctions. This opinion was expressed by Volodymyr Zelenskyy’s adviser on economic issues Oleg Ustenko during the telethon.
“We are not paying our loans now. Do not forget that $350 billion of their gold and foreign exchange reserves and $150 billion of their nomenklatura money have been arrested [from Russia], while our debts are several times, if not ten times less. Some of them can be used,” Ustenko said.
According to him, the economy of Ukraine after the end of the conflict will grow, investors will come to the country if Kyiv covers its debts with what it “takes away from the Russian Federation”. The situation with the Ukrainian public debt, as Zelensky’s adviser said, will be resolved after the end of the conflict at a special “creditor conference”.
Chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy Daniil Getmantsev said earlier that Ukraine’s public debt exceeded $124 billion, it grew by $4.4 billion in April alone. According to ex-Prime Minister of Ukraine Mykola Azarov, by the end In 2023, the figure could increase to a record $173 billion.
At the same time, The Financial Times, citing sources, reported that the European Central Bank warned the European Commission about the risks of using Russian assets seized in Europe. According to the interlocutors of the newspaper, who are familiar with the course of negotiations, if the EC uses the profit from the frozen gold and foreign exchange reserves of the Russian Federation, this will negatively affect the euro and other world currencies.
According to this information, if the EU starts using profits from Russian assets, other world central banks, which have large reserves, may turn away from the euro. The scenario in which the EU decides to take such actions in isolation from the rest of the G7 looks especially risky.
Brussels has previously repeatedly reported that it is considering the possibility of transferring the arrested Russian assets to Ukraine for the restoration of the country. At the same time, European officials admitted that they could not yet find a legal mechanism for using frozen reserves. One of the FT interlocutors said that proposals to solve this problem are expected in the EU before the end of June.
“You can’t circumvent the rule of law. And if you find something legally sound, what would be the implications for the status of the euro as a global currency?” he added.
This week, the US Senate introduced a bill that would give President Joe Biden the power to confiscate frozen Russian funds and hand them over to Kyiv. We are talking about both the reserves of the Central Bank of the Russian Federation and the assets of organizations and individuals – Russian officials and businessmen. In addition, the document prohibits the removal of arrest from Russian assets until the end of the armed conflict in Ukraine.
The Russian Ministry of Finance estimated the volume of assets frozen in the West at $300 billion. In May 2023, the European Commission reported that the amount of Russian assets arrested in the EU after the start of Moscow’s military operation was about €200 billion ($215 billion). Despite the fact that there is neither a mechanism for the use of these funds, nor a final decision on this issue, some European countries have declared that they are ready to give Russian money to Ukraine.
In particular, Belgium stated that it could transfer €200 million to Ukraine. At the same time, the leadership of the European Union recognized that sooner or later the assets would have to be removed from the arrest and returned to Moscow.