With the war entering its second year and the upcoming US presidential election in 2024, a new Russian front is opening. It is not warfare on the ground, but economic warfare waged with the stroke of a pen in western capitals. And it’s not immediate, but it’s clearly visible on the horizon, just as sanctions on Moscow’s oil loomed a year ago.
The new front is worth $365 billion: at stake is the seizure of the monetary reserves of the Central Bank of Moscow, most of which are held and confiscated in Europe. Those funds could go to Ukraine for reconstruction and before that allow it to continue the war, especially if the new Republican majority in the House of Representatives blocks new American aid when the current $43 billion package is exhausted in September.
Michael McFaul spoke yesterday on the subject. McFaul, former American ambassador to Moscow until 2014, adviser to Barack Obama, now a Stanford professor near the White House, is one of the two coordinators of the group of experts recommending sanctions against Moscow by western governments. The other coordinator is Andrii Yermak, head of the office of Ukrainian President Volodymyr Zelenskyy.
In a meeting with a small group of international media, McFaul made it clear: “We think now is the right time to hand over these resources to the Ukrainian government,” he said of the $365 billion in Russian reserves now mostly in Germany be parked and confiscated , France and Austria. In recent days, Matt Gaetz, a Florida Republican who sits in the House of Representatives, has deposited in the courtroom the first resolution calling for the suspension of financial and military aid to Kiev. In the coming months, the obstacles facing Biden on this front can only grow. ‘The debate over support for Kiev will intensify a lot, especially as McFaul admitted yesterday – as the campaign begins. Hence our idea that new resources need to be found for the Ukrainian government».
They would be the largest reparations imposed on any power at war in at least a century. A unanimous decision by the European Union is needed, and many doubts remain, especially in Germany: in Berlin, it is argued that up to this point it is not legal to violate the prerogatives of a sovereign state, even when it comes to Russia .
McFaul doesn’t fit. ‘It happened to Afghanistan not long ago – he notes -. Why not when Moscow is increasing its state reserves thanks to the extraordinary gas and oil proceeds from the invasion of Ukraine?’ For him, returning those $365 billion to the Kremlin would trigger a political crisis in the United States. “I don’t see why my mother in Montana should pay for the reconstruction of Ukraine with her taxes,” says McFaul when these reservations are there. According to McFaul, the seizure would also be a signal to China of what might happen if it invaded Taiwan.
The Yermak-McFaul group is also urging Europe to sanction Russia’s diamond trade and crack down on gold, circumventing the ban. But it’s also trying to open a few other fronts: taking action against Rosatom, Moscow’s state nuclear monopoly, letting Western governments declare Russia a state sponsor of terrorism, and expanding sanctions against pro-Putin propagandists and Russian artists who support them do not denounce the regime. ‘This is a war of ideas – McFaul interrupts -. You cannot pretend to be someone when you are in Russia and someone else when you are in Italy».