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| (Reuters) |
Europe is considering plans to freeze Russian assets and use them to help secure Ukraine in an effort to end the war that began when Vladimir Putin's troops invaded their neighboring country more than three years ago, according to an article at Financial Times (FT). In a separate report, Norway is considering an increase of military aid to Ukraine in the wake of concerns about U.S. reluctance to continue support of European allies. Norway holds $1.78 trillion in the world's largest sovereign wealth fund, and the country could have a profound impact on a possible peace deal.
Under the headline "Europeans move towards seizing €200bn of Russian assets; French discuss proposal for Kremlin to lose securities if it breaches a future ceasefire," a team of FT reporters writes:
Europe’s biggest powers are swinging behind efforts to seize more than €200bn of frozen Russian assets, as they draw up plans for a ceasefire deal in Ukraine. France and Germany, long opposed to a full-blown seizure of the assets held in the EU, are discussing with the UK and other countries ways in which they could be used. French officials have discussed a proposal for European capitals to seize the assets if Moscow were to violate a future ceasefire deal in Ukraine, said three people briefed on the talks, as part of efforts to provide post-conflict security guarantees for Kyiv.
What is driving discussions among European companies? It comes after Donald Trump's recent announcement that he no longer is interested in providing security for Ukraine, prompting many observers of international relations to conclude the U.S. was aligned with Russia and could no longer be counted on to support its allies. From the FT report:
The talks come amid a flurry of European diplomatic efforts, led by France and the UK, to devise a peace plan for Ukraine, sparked by U.S. President Donald Trump’s decision to open bilateral negotiations with Moscow aimed at ending the war. G7 allies froze about €300bn in Central Bank of Russia assets in 2022 after Moscow’s full-scale invasion of Ukraine, of which the vast majority — some €190bn — sit in Belgium’s central security depository Euroclear, with smaller amounts held by France, the UK, Japan, Switzerland, and the U.S.
Currently, the income generated by these assets — mostly cash and government bonds — is being used to repay G7 nations for $50bn worth of loans to Ukraine, but the underlying assets are not being touched. Countries including Ukraine, Poland and the Baltic States have long pushed for the seizure of the underlying assets, but key capitals, including Berlin, Paris, and Brussels, have previously pushed back because of concerns that seizing state property would set a precedent under international law. The European Central Bank was also worried that the euro’s status as a safe option for foreign reserves would be put at risk.
Most of the assets are denominated in euros. During talks with Trump last week, Emmanuel Macron, president of France, said seizing the assets immediately would not be “respecting international law” but the money could be “part of the negotiation at the end of the war.” Germany’s chancellor-in-waiting, Friedrich Merz, has indicated he would consider backing a proposal that involved seizing frozen Russian assets, said a person familiar with the matter. Merz is speaking with caretaker chancellor Olaf Scholz on Wednesday to align positions ahead of a summit of EU leaders on Thursday.
UK Prime Minister Sir Keir Starmer on Monday said London was looking at how the assets might be deployed. “Obviously the proceeds and profits are being used,” he told MPs, speaking after signing a deal with Volodymyr Zelensky, Ukraine’s president, over the weekend for the UK to lend £2.26bn to Ukraine, backed by profits from sanctioned Russian sovereign assets.
“On the [underlying] assets themselves, it’s a very complicated issue. It’s not straightforward,” Starmer said. “But I do think we need to do more, and we are doing more work to look at what the possibilities are, along with other countries.” Two of the people familiar with the French proposal said it had been well received by other European allies, but that it was far from being agreed. The camp in favor of seizure has been given impetus by the Trump administration’s threat to pull military support to Ukraine. “More and more countries are willing to use [frozen asset seizure] as leverage,” said one person.
What is forcing Europe to consider all of its options? That points again to Trump, and his seemingly unshakable loyalty to Putin, perhaps the most notorious and murderous dictator in the world. Trump appears to be bailing out on Europe, possibly exiting NATO, which largely has kept peace on the continent since the end of World War II.
As for the role Norway could play in the Russia-Ukraine conflict, United24 Media reports under the headline "Norway Considers Using World’s Largest Sovereign Wealth Fund to Boost Support for Ukraine. Vlad Litnarovych writes:
Norwegian authorities are considering a major increase in military aid to Ukraine and defense spending amid concerns over the new U.S. administration’s reluctance to continue supporting European allies, Euractiv reported on March 1.
Norway holds $1.78 trillion in the world’s largest sovereign wealth fund, including approximately $114 billion in profits generated from soaring gas prices in 2022 and 2023 due to the war.
“Norway is one of the few countries that has large amounts of money readily available, and we must therefore multiply our support for Ukraine immediately,” Liberal Party leader Guri Melby said.
Economically, Norway has been replacing Gazprom as the EU’s largest gas supplier since Russia started its invasion of Ukraine in 2022.
Opposition parties in Norway are demanding a significant boost in funding for arms deliveries to Ukraine, along with other measures to encourage domestic and EU-wide defense spending.
A proposal already in Parliament calls for an additional 100 billion Norwegian kroner ($8.9 billion) in military aid for Ukraine this year, Euractiv quoted Sveinung Rotevatn, deputy chair of the opposition Liberal Party, as saying.
If approved, this would raise Norway’s total funding for Ukraine to $12 billion, up from $3.1 billion last year.
The Liberals and the Socialist Left Party have called for an emergency parliamentary session and expect the government to present a financial proposal soon.
Norway already is a major supporter of Ukraine's effort to defend itself against Putin's aggression, which the U.S. (once leader of the free world) now appears to support, with Trump in the White House. Litnarovych writes:
Prime Minister Jonas Gahr Støre, who attended a Ukraine-focused summit of European leaders in London, has promised that the proposal will be unveiled shortly.
Oslo has already pledged long-term support for Ukraine worth 167 billion kroner ($15.4 billion) through 2030, a Norwegian Foreign Ministry representative reminded Euractiv.
Since 2001, Norway has adhered to a fiscal rule limiting withdrawals from the fund to 3% per year, but a growing number of politicians are advocating for increased defense and Ukraine-related expenditures, Euractiv noted.
According to Euractiv, many Norwegian politicians and experts argue that Oslo should allocate its energy windfall profits to support Ukraine, given the surge in gas prices caused by Russia’s invasion and Europe’s energy shift.
According to European Commission data, Norway’s share of EU gas imports rose from 25% in Q4 2021 to 33% in Q3 2024.
Norway’s Finance Ministry estimates that the country’s additional earnings from this energy shift totaled $113 billion—more than the combined military aid provided to Ukraine by the U.S. and Germany as of October 2024.
Norway's efforts go beyond financial support -- more or less indicating it wants nothing to do with the United States under Trumpism. You could say Oslo has waved a giant middle finger at Washington, D.C. Litnarovych reports:
Earlier, Norwegian fuel supplier Haltbakk Bunkers announced its decision to cease refueling U.S. Navy ships, citing concerns over recent diplomatic tensions between Washington and Kyiv.
The company, a major player in Norway’s maritime fuel industry, stated that it would no longer provide fuel to American military vessels until there is a shift in the current U.S. administration’s approach.
That suggests all Americans who value their democracy -- which probably is everybody except brain-dead MAGAts -- should become big fans of Norway. Better yet, it might be a good idea for Americans to follow Norway's example.
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