Western Assets in Russia: Kremlin Threatens Fiscal Retaliation

  

8,193 views Apr 28, 2024 #Russia #UkraineWar #Moscow

(Frances Coppola is an Economist and Bank Commentator.)Russia's RIA state news agency says the West stands to lose assets worth at least 288 billion dollars, if frozen Russian assets are confiscated.

• After Moscow invaded Ukraine, the US and its allies blocked around 300 billion dollars’ worth of assets.

Now some western powers have floated the idea of using confiscated holdings to rebuild Ukraine once the war has finally ended. But Russia reaffirmed on Sunday that counter-measures could follow what it calls "western thievery". According to the RIA, the top investors in the Russian economy include

• Cyprus, with more than 98 billion dollars,
• The Netherlands with 50 billion and
• The UK with nearly 19 billion.

It also reports that

• Germany has 17 billion dollars invested, 
• France 16 billion dollars and
• Italy almost 13 billion.    

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By Reuters

April 22, 202411:15 PM PDT Updated 6 days ago

Russian President Vladimir Putin meets with Russian Federation Council Speaker Valentina Matviyenko at the Kremlin in Moscow, Russia August 1, 2023. Sputnik/Alexander Kazakov/Kremlin via REUTERS/File Photo

MOSCOW, April 23 (Reuters) - An ally of President Vladimir Putin warned Europe on Tuesday that Russia has already drafted legislation to retaliate if nearly $300 billion of Russian assets were seized by the West and used to help Ukraine.

After President Vladimir Putin sent troops into Ukraine in 2022, the United States and its allies prohibited transactions with Russia's central bank and finance ministry, blocking around $300 billion of sovereign Russian assets in the West.

Top officials in the United States want to seize the assets to help support Ukraine, though some bankers and European officials are worried that simply taking the assets would create a dangerous precedent.

The U.S. House of Representatives passed legislation on Saturday including a bill with a provision that would allow the confiscation of Russian sovereign assets, though the lion's share of the assets are in Europe. . .

Reuters

Kremlin says it has list of Western assets to be seized if Russian assets are confiscated | Reuters

Russia assesses impact of possible US seizure of assets
American lawmakers approved a bill allowing the confiscation of another state’s funds earlier this week

Chairman of the Central Bank of Russia Elvira Nabiullina. © Getty Images / Epsilon / Contributor

Russia’s financial stability will not be affected if the US seizes its frozen assets, Bank of Russia Governor Elvira Nabiullina told journalists on Friday.
The US and its allies have blocked around $300 billion in Russian central bank assets as part of Ukraine-related sanctions, most of which are being held in the EU. 

• On Wednesday, US President Joe Biden signed a bill allowing the White House to seize some $6 billion in Russian state assets that are sitting in US banks.

“As for the possible confiscation of our gold and foreign exchange reserves, it will not have any impact on financial stability, as we have halted operations with them long ago, we do not use them,” Nabiullina said at a news conference.
The Bank of Russia has been diversifying its forex reserves for several years, and is currently conducting operations with reserves that are not affected by sanctions, she added. 
“This will help mitigate financial stability risks if they arise, but currently there are no such threats,” the head of the regulator stressed.

READ MORE: US seizure of Russian assets would accelerate de-dollarization – ex-IMF official 

The White House has long insisted on confiscating the funds to aid Ukraine in its war effort against Russia. Meanwhile, 

• EU lawmakers, as well as G7 finance chiefs, have raised deep concerns over the legal ramifications of any asset seizure. 
• EU nations, which hold the lion’s share of frozen Russian funds, are concerned that expropriating them would trigger an outflow of investment and destabilize the euro.

Nabiullina previously warned that the seizure of profits from frozen Russian funds, as well as the confiscation of the funds themselves, would lower the attractiveness of the euro and the dollar as reserve currencies in international markets.

Moscow has repeatedly said the seizure of its assets would be “theft.” After the US House of Representatives approved the bill authorizing the confiscation of Russian money, Kremlin spokesman Dmitry Peskov warned that Moscow would immediately retaliate to the move. 

Russian Deputy Foreign Minister Sergey Ryabkov has said Moscow could downgrade diplomatic relations with Washington if the assets are seized.

___________________________________________________________________________ #Russia #UkraineWar #Moscow #RIA #VladimirPutin #RussiaEconomy

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