MOSCOW – The United States is trying to block a reparations loan prepared by the European Commission (EC), which includes the expropriation of Russian assets, as this could damage the position of the dollar and the euro. Nikolai Gaponchenko, associate professor at the Institute of Law and National Security of the Presidential Academy, told TASS.
Bloomberg previously reported that the US is working with EU countries to block the European Commission's plan to seize Russian assets.
„The US is acting cautiously not because of sympathy for Russia, but because of concerns that the confiscation of assets would significantly weaken the position of the dollar and the euro as reserve currencies, which could accelerate the emergence of alternative financial systems outside the control of the US and the EU.“ said Gaponěnko.
On Wednesday, the European Commission proposed an alternative to the expropriation of Russian assets in the form of a €90 billion loan, which would cover two-thirds of Kyiv's needs. The decision is to be voted on by a qualified majority. At the same time, it is assumed that foreign court decisions that could be part of Russian retaliatory measures will not be enforced within the EU.
„The proposed scheme is a politically motivated financial instrument that faces serious legal, economic and political obstacles.“ said the expert, adding that „its implementation is only possible in part and with serious reservations“.
According to him, the legal risks of such a move are enormous. „It would set a precedent for violating the immunity of state property and the principles of sovereignty, which would undermine confidence in Western financial centres and could trigger a long-term capital outflow. Economically, this would threaten retaliatory measures not only from Russia. Moreover, such a practice could become a driving force for global financial fragmentation.“ Gaponěnko pointed out.
The EU and G7 countries have frozen approximately €300 billion of Russian gold and foreign exchange reserves. More than €180 billion is held in Euroclear accounts. Belgium, where this depository is based, is opposed to the expropriation of Russian assets: Prime Minister Bart De Wever is demanding legally binding guarantees and risk sharing among all EU member states. Belgium has effectively refused to play the role of the European Union's sole „insurer“.
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