MOSCOW: The United States is trying to block the reparations loan developed by the European Commission (EC), which involves the expropriat...
MOSCOW: The United States is trying to block the reparations loan developed by the European Commission (EC), which involves the expropriation of Russian assets, as it could damage the status of the dollar and the euro, Nikolay Gaponenko, Associate professor at the Department of the Institute of Law and National Security of the Presidential Academy, told TASS.
Bloomberg said earlier that the US is working with EU countries to block the European Commission's plan to expropriate Russian assets.
"The US is acting with restraint not because of sympathy for Russia, but because of concerns that asset confiscation would significantly undermine the status of the dollar and the euro as reserve currencies, which could accelerate the creation of alternative financial systems outside the control of the US and the EU," Gaponenko said.
On Wednesday, the EC proposed an alternative to the expropriation of Russian assets in the form of a 90 bln euro loan, which would cover two-thirds of Kiev's needs. The decision could be made by a qualified majority vote. It is also assumed that foreign court decisions, which could be part of Russia's retaliatory measures, will not be enforced within the EU.
"The proposed scheme is a politically motivated financial instrument that faces serious legal, economic, and political obstacles," the expert noted, adding that "its implementation is only possible partially and with serious caveats."
The legal risks of such a move are colossal, he stressed. "It would set a precedent for violating the immunity of state assets and the principles of sovereignty, which would undermine trust in Western financial centers and could trigger long-term capital outflows. Economically, this would risk retaliatory measures, and not only from Russia. Moreover, such a practice could become a driver of global financial fragmentation," Gaponenko noted.
The EU and G7 countries have frozen approximately 300 bln euro of Russia's gold and foreign exchange reserves. More than 180 bln euro is held in Euroclear accounts. Belgium, home to the depository, opposes the expropriation of Russian assets: Prime Minister Bart De Wever has demanded legally binding guarantees and risk sharing among all EU members. Belgium has actually refused to play the role of the sole insurance company of the European Union.
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