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By Ben Aris, Intellinews, 1/2/24

The US is pushing for the expropriation of $291bn in Russian Central Bank reserves frozen in the West and urging the EU to transfer the funds to Ukraine.

The move marks a shift in the US stance on the use of these seized assets, with discussions taking place within the G7 in December to formulate a strategy for seizing Russian reserves by February 24, 2024, the second anniversary of the invasion of Ukraine, The Bell reports.

Ukrainian President Volodymyr Zelenskiy, after a December visit to Washington, said that he had discussed the issue of transferring Russian reserves to Ukraine and believes that this money should be spent on protecting Ukraine.

Following the start of the war, approximately €260bn of the Russian Central Bank’s assets were frozen in G7 countries, mostly by Euroclear in Belgium, as well as other EU countries and Australia, comprising nearly half of Russia’s $643bn in international reserves as of February 2022.

In December both the FT and then The New York Times reported that the United States has changed its point of view on the use of Russian Central Bank reserves seized in the West and is now, albeit gently, insisting that this money should be transferred to Ukraine.

The majority of these funds, over €210bn, are located in EU countries, with €191bn held in the Euroclear depository in Belgium. Another €19bn is frozen in France, €7.8bn in Switzerland and only €4.6bn in the US.

While Western officials are considering various options for the use of these funds, including supporting Ukraine’s economy and financing its budget deficit, concerns about potential repercussions, both economic and geopolitical, accompany the decision.

The EU, particularly Germany, France, and Italy, has been reluctant due to fears that such a move could jeopardise financial stability and undermine trust in the euro’s status as a reserve currency, thus driving up borrowing costs for the EU that could cost it billions in the long run. The European Central Bank (ECB) has been especially outspoken in its opposition to any scheme that illegally seizes the CBR’s money.

An alternative scheme proposed by the EU is to impose a 100% tax on the profits these assets earn, which is legally much easier to do but would only generate about €3bn a year. The assets of the Russian Central Bank could also be used as collateral for borrowing by the Ukrainian government on the international market in another option.

Another issue being discussed is whether this money can be used only to restore the Ukrainian economy and finance the Ukrainian budget deficit or can be spent directly on the purchase of weapons, NYT sources say.

If the assets are seized one of the legal arguments to justify this is that the Russian money will be seized in lieu of reparations for the destruction Russia’s aggression has caused, but if this argument is used then the CBR’s assets could only be legally used for reconstruction and not the purchase of weapons to sustain the current conflict.

A written American presentation to the G7, seen by the NYT, proposes to allocate money in successive tranches through the World Bank or the European Bank for Reconstruction and Development (EBRD) – in this case there will be no talk of direct purchases of weapons, as the mandates of both development banks precludes them from dealing in arms.

A US official told The New York Times that the issue of using Russian reserves will remain on the agenda even if Republicans agree to unblock a $50bn aid package for Ukraine.

But momentum to expropriate Russian reserves is clearly building as Western countries cast about for alternative ways to fund Ukraine’s war and subsequent reconstruction. Ukraine fatigue has become palpable in the last six months of 2023 and financial support packages from both the US and the EU have run aground in the face of opposition but politicians. However, a renewed effort to pass these stalled packages will be made in January and February.

As the threat of expropriation builds, the Kremlin has made it clear it will retaliate by expropriating more Western assets that remain in Russia. When asked by journalists in the last days of December if there is an expropriation list, presidential spokesman Dmitry Peskov replied: “There is,” without giving more details.

Seizing the CBR funds would be entirely unprecedented. Other central banks have been frozen in other sanction regimes – including funds from the Central Banks of Iran, Iraq, Syria, and Venezuela – but the money has never been seized and almost always returned to the object of the sanctions after the sanction’s regime is lifted. (Iranian funds remain frozen after 45 years but remain the property of Iran.) Central bank funds have always been seen as sacrosanct assets in the international financial system.

For third countries, including China, India and Saudi Arabia, which between them control more than $5 trillion in international reserves, the confiscation would send a signal that it is not safe to keep money in Europe and if they exit that could dramatically weaken the euro and the EU’s financial system.

As discussions unfold within the G7, the decision on the fate of the Russian reserves will be crucial, with potential repercussions on international financial dynamics and geopolitical relations for years to come should the CBR money be seized.

Gonzalo Lira. ©  YouTube / Gonzalo Lira

RT, 1/12/23

Chilean-American blogger Gonzalo Lira has died in a Ukrainian prison, Russian news agency TASS said on Saturday, citing a response it received from the US Department of State. The blogger’s death was first announced by his family on Friday. 

Lira, 55 at the time of his death, lived in Kharkov and blogged as ‘CoachRedPill,’ but switched to YouTube commentary after Russia launched its military operation in Ukraine in February 2022. He was arrested by the Security Service of Ukraine (SBU) last May and accused of “discrediting” the Ukrainian leadership and the military.

“I cannot accept the way my son has died. He was tortured, extorted, incommunicado for 8 months and 11 days and the US Embassy did nothing to help my son. The responsibility of this tragedy is the dictator Zelensky with the concurrence of a senile American President, Joe Biden,” his father Gonzalo Lira Sr. wrote in a note published by The Grayzone.

Lira Sr. also reached out to X host Tucker Carlson, confirming the death of his son in Ukrainian custody. He had spoken to Carlson about the case in early December.

READ MORE: Who was the ‘tortured’ US journalist who died in Ukrainian captivity?

Lira resurfaced from custody in late July with a series of posts on X (formerly Twitter), revealing his torture in jail and attempts by the SBU to extort him for money. He said he was trying to flee to Hungary and seek asylum. “Either I’ll cross the border and make it to safety, or I’ll be disappeared by the Kiev regime,” he wrote, in his last public message.

Two days later, a source confirmed to RT that Lira had been caught and imprisoned by Ukrainian authorities. 

According to a handwritten note Lira’s sister received on January 4, provided to the Grayzone by her father, Gonzalo Lira Jr. had severe health problems caused by pneumonia and a collapsed lung, which began in mid-October. Ukrainian prison authorities only acknowledged the issue on December 22, and stated he would undergo surgery. 

Following his father’s appearance on Carlson’s show, X owner Elon Musk personally inquired about Lira’s case with both US President Joe Biden and Ukrainian leader Vladimir Zelensky, apparently to no effect.

Lira was a national of both the US and Chile. According to his thread from last July, the Chilean Embassy in Kiev at least tried to help him, while the US mission gave him only “empty bromides.” Lira suggested that this was because Victoria Nuland – currently the acting deputy to Secretary of State Antony Blinken – hated him personally.

By Kyle Anzalone, Libertarian Institute, 1/2/24

According to a new poll, the number of voters who view foreign policy as a top issue has doubled during the past year. Joe Biden has defined his presidency by waging a proxy war against Russia in Ukraine, backing the Israeli onslaught in Gaza, and engaging in a military buildup in the Asia-Pacific to fight a future war with China. 

The Associated Press survey found, “About 4 in 10 US adults named foreign policy topics in an open-ended question that asked people to share up to five issues for the government to work on in the next year.” Last year, only 18% of Americans said foreign wars were a top issue. 

About 20% of Americans are concerned about overseas wars, up from five percent. Five percent of Americans mentioned the Israel war in Gaza. Four percent named the war in Ukraine, down from six percent in the previous year.

President Biden is struggling in recent polling. Two demographics that Biden won in 2020 now prefer Trump. A USA Today poll found Trump at 39% ahead of Biden at 34% among Latino voters. The trend was repeated among young voters who preferred Trump, 37%, to Biden, 33%.

Younger voters are the most likely Americans to object to President Biden’s support for the Israeli war against Palestinians in the besieged Gaza Strip. As the Israeli military operations in Gaza indiscriminately kill and starve Palestinian civilians, more Americans are protesting Biden’s support for Tel Aviv. The President has recently been confronted with chants of “Genocide Joe.

The New York Times reported on Tuesday that Biden has been more involved regarding Israel than any other issue and the White House has no plans to place conditions on the weapons sent to Tel Aviv for use amidst its brutal war. 

“Biden has involved himself more intensely in the conflict than almost any other issue in three years in office,” the outlet reports. “But there is no serious discussion inside the administration of a meaningful change in policy, like cutting off the arms supply to Israel. Instead, Biden remains determined to navigate the crisis within the crisis by using the credibility he earned through steadfast support of Israel to shape its next chapter.”

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