The Kremlin has recently issued a threat to Europe and the US, warning of potential “serious consequences” if Russian assets held abroad are used to support Ukraine’s budget and war efforts. These consequences could include reciprocal financial seizures or even a rupture in diplomatic relations.
On Friday, a spokesperson for Vladimir Putin stated that if the Biden administration and European leaders intended to seize frozen Russian central bank assets worth over $300 billion due to the invasion of Ukraine, they should understand that Russia will not abandon those who take such actions.
According to The New York Times, the Biden administration has initiated discussions with G7 nations regarding a potential plan to seize funds held mostly in Europe. The purpose of these discussions is to determine whether these funds can be used directly for the Ukrainian military or for reconstruction and budgetary purposes.
Discussions regarding providing new military aid to Ukraine have gained momentum due to the obstruction of a deal by Republicans in Congress. The report suggests that Joe Biden did not approve of the strategy initially, but the urgency increased as Ukraine’s counteroffensive failed to make progress in the war.
Dmitry Peskov, spokesperson for Vladimir Putin, expressed concern over reports that the Biden administration is pressuring European countries to develop plans for seizing Russian assets. According to Peskov, this issue is viewed as unacceptable and poses a potential threat to the global financial system.
German prosecutors have taken action to seize over €720m from a Russian financial institution’s bank account in Frankfurt. This move indicates possible support from European nations for the strategy being pursued.
President Biden has taken action to impose sanctions on banks and financial institutions that support Russian arms-making industries. This decision aims to disrupt the Russian war machine by cutting off crucial supplies such as semiconductors and machine tools.
Janet Yellen, the US Treasury Secretary, has stated that the United States is prepared to use its authority to take decisive action when necessary. This could potentially impact Russia’s export of diamonds and seafood, as these products are mainly processed outside of the country despite originating there.
