Support appears to be growing in the West to fully seize hundreds of billions of dollars’ worth of Russian assets that were frozen following Moscow’s full-scale invasion of Ukraine, amid speculation that U.S. President-elect Donald Trump will try to seek a peace deal between Moscow and Kyiv soon after he takes office next week.

Nations, including the United States, Canada, Britain, several European Union members states and Japan, froze about $300 billion of assets owned by Russia’s Central Bank after Moscow’s full-scale invasion of Ukraine in February 2022. Some $200 billion of the assets are held in the Euroclear facility in Brussels, with approximately $5 billion frozen in the United States.

U.S. media reported Tuesday that outgoing President Joe Biden is making a last-minute push for European allies to fully seize the assets so they can be used as leverage in any future peace negotiations.

Some European lawmakers are pushing for the assets to be given to Ukraine, however, to buy weapons and help to rebuild the country. Others fear that seizing the assets would deter investors and destabilize Western currencies.

Moscow has said that any seizure of its assets would be illegal and has pledged to retaliate.

Ukraine reconstruction

Ukraine’s reconstruction costs will reach at least $486 billion over the next decade, according to a February 2024 report by the Ukrainian government, the World Bank Group, the European Commission and the United Nations.

Britain holds about $22 billion worth of Russian assets. Lawmakers voted last week in favor of a nonbinding motion to seize the assets and give the money to Kyiv.

Member of Parliament Mike Martin, who brought the motion, cited uncertainty over future military aid for Kyiv under Trump.

“We do know that he feels differently about Ukraine. He feels differently about the security of Europe, and he feels differently about Russia. So, if we want to shift the dial on Ukraine, especially in the face of a drawdown or potential drawdown in U.S. support, we need to go further and faster, and we need to seize these $300 billions of frozen assets and send them to Ukraine,” Martin told lawmakers.

Geopolitical signals

“It is not just about actions that lead to practical outcomes. It is also about signals that we send to our geopolitical opponents. ... Any potential small amount of financial instability that the G7 countries moving together will create will be miniscule as compared to the financial instability of Ukraine losing this war,” Martin said.

The Liberal Democrat MP was among the signatories to a letter to The Times of London newspaper earlier this month calling for concerted European action to seize the assets. It also was signed by senior lawmakers from Germany, Poland, the Baltic countries and Finland.

“Previous loans and emergency funding are not enough — and leave Western taxpayers on the hook. Only using the assets themselves ensures that Russia pays for its crimes,” the letter said.

G7 loans

G7 nations already are providing Ukraine with $50 billion in loans, using the Russian assets as collateral. Additionally, the interest earned on the frozen assets is being used to fund aid for Kyiv.

Any decision by the incoming Trump administration to cut U.S. aid for Kyiv could prompt Europe to seize the Russian assets, said Alexander Kolyandr of the Center for European Policy Analysis.

“We would have a fear of abandoning Ukraine to Putin's war machine. And honestly, I suspect if it comes to that, the decision would be to give this money to Ukraine.”

US weapons

Kyiv could pledge to use the assets to purchase American weapons and secure Trump’s support, Kolyandr added.

“It fits nicely into the America First idea. It helps Ukraine to get the arms. It helps Trump to score some victories at home,” he told VOA.

There is some opposition in Europe, though, to seizing the assets.

European fears

“The reservations are mostly coming from the European Central Bank and the national governments,” Kolyandr said. “They are afraid that if they seize the Russian assets or practically nationalize them and give it to Ukraine, then it would thwart trust in the euro as a reserve currency — and foreign countries would be pretty afraid of investing their sovereign assets in European stocks, shares, bonds and currency.

“In my view, if a foreign country had any reservations about the safety of its sovereign assets, those reservations should have appeared ... when the assets were frozen,” Kolyandr said.