The confiscation of Russian assets in favor of Ukraine is gaining relevance against the backdrop of delays in aid from the West

At the end of the year, Ukraine received a new tranche of $900 million from the IMF and another one and a half billion euros from the EU. However, the approval of large packages from bilateral donors, the EU and the USA, is still delayed.

In the US, lawmakers have not yet agreed on the aid, due to debate over domestic issues such as immigration policy, and in the EU, Hungary is speaking out against a large aid package.

Despite the delay, the International Monetary Fund is convinced that the EU and the USA will approve large packages for Ukraine already in the first quarter.

Such assessments were shared by the director of the European department of the Fund Alfred Kemmer. He emphasizes that donors “make extraordinary efforts to approve packages and provide funds on time.”

“Both the US administration and the European Union are committed to getting these packages through the budget process and providing the funds. This is very important. We also emphasize that the appropriations must come on time. Obviously, this issue will come up at the beginning of the year,” Kemmer adds. read the full interview on the website of the Voice of America Ukrainian Service soon.

How long can Ukraine last without large-scale economic support from outside?

Aid delays are not actually catastrophic, the predictability of external financing is more important, says a Ukrainian financier based in Australia, founder of the FinPoint company Sergey Budkin.

“A month is not a problem, two or three months is theoretically not a problem, but it will already have a really strong impact on the country’s gold and currency reserves. And the longer the delay, the bigger the problem will become,” he says.

The financier assumes that problems with maintaining macroeconomic and exchange rate stability may begin in six months “without significant and, most importantly, predictable help from Western countries.”

According to estimates by the Ukrainian financial company Dragon Capital, provided by Reuters, Kyiv can withstand a shortfall in international aid of several billion dollars, but a deficit of $10 billion could “create problems for macroeconomic stability.”

As early as February, a plan to use Russian assets for the benefit of Ukraine may be announced – NYT

Almost 300 billion dollars of Russian state assets frozen in the West can become a significant source of support for Ukraine.

US government officials told The New York Times about international discussions on how to seize these assets as part of sanctions against Russia for its invasion of Ukraine.

The publication reports that the allies may announce a corresponding plan already in February.

In its editorial, the Financial Times notes that the legal basis for such confiscation is strong, but worries about the impact of such steps on financial stability and the creation of an ambiguous precedent.

“The strong concern is that this could harm international financial stability – the status of the dollar and the euro as reserve currencies – by eroding confidence in the placement of reserves in other countries.”

A number of Western commentators call for the confiscation of Russian state assets and their transfer to Ukraine.

In particular, an American economist speaks for this Anders Aslund: “If the USA cannot provide Ukraine with financing, it is necessary to immediately confiscate 280 billion dollars of frozen reserves of the Russian Central Bank and transfer them to Ukraine,” the expert tweeted.

He warns that without budget financing in the amount of 40 billion dollars, Ukraine will face “serious inflation” next year.

“Transfer the frozen Russian assets to Ukraine immediately,” the historian urges in an article for the Atlantic Anne Applebaum.

She points out: “The frozen assets will solve some of Ukraine’s pressing budget and financial problems. But more importantly, $300 billion is a reasonable down payment on the reparations that Russia must pay to Ukraine.”

Responding to reports of discussions about a possible asset seizure, a Kremlin spokesman said on December 22 that Russia would defend its rights in the courts and through other means.