RUSSIA – $300BN Frozen Russian Assets to back BONDS as USA & UK Propose Radical Approach
Video Summary
The Russian economy is currently facing a significant challenge as a result of the war in Ukraine, with over $300 billion in assets frozen due to international sanctions. These assets, held in overseas institutions, were frozen by financial institutions immediately after Russia’s invasion of Ukraine in 2022. The frozen assets are estimated to be throwing off between $3-4 billion in profit each year, with a total of $7-8 billion in profit generated over the past two years.
The European Union has proposed taking 90% of the revenues generated by Russia’s frozen assets to fund Ukraine’s military efforts, with the remaining 10% going towards the EU’s central budget. The US and UK have proposed a different approach, issuing bonds, known as “freedom bonds” or “reparation bonds”, which would link the value of the frozen assets to the bonds. This would allow the assets to be used to fund Ukraine’s defense efforts in the future.
The proposals have sparked concerns over legal issues and the potential impact on international financial markets. Russia has responded to the proposals by threatening legal action against the institutions involved, resulting in a high degree of nervousness among financial institutions.
The situation is complex, with the EU and US/UK proposals presenting different approaches to addressing the frozen assets. The outcome will likely depend on the legal and political considerations, with the potential to have a significant impact on the Russian economy and the war in Ukraine.
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