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If Ukraine is going to defeat Russia and rebuild itself after the war, it will need huge sums of money, probably exceeding what Western electorates and politicians are willing or able to provide. The good news is that there is a massive pot of non-Western money already available: the $300 billion of frozen Russian sovereign assets held in Western jurisdictions. The bad news, however, is that Western countries have been unable to agree on a shared plan of action to use these assets.
Frozen Russian reserves could tip the scales of the war in Ukraine’s favor and greatly reduce the financial burden on Western taxpayers. Yet opponents of seizing them have failed to grasp the harsh economic realities of the situation. The current levels of Western support simply do not add up to a Ukrainian victory. Western funding merely to keep Ukraine in the war currently totals roughly $100 billion annually, or close to $8.5 billion per month. But for Ukraine to pose a serious challenge to Russia, the West would need to push this spending closer to $150 billion per year – or about $12.5 billion per month. This was the level of spending in mid-2023, when Ukraine was gaining the upper hand. By late 2023, however, spending had collapsed to $4 billion per month, and a bill to provide additional aid was stuck in the US Congress, causing Ukraine to lose lives, territory, and momentum. Should we really expect Western governments to tap their own taxpayers for another $50 billion per year to fund Ukraine? What if Donald Trump wins this year’s US presidential election and current American funding (close to $45 billion per year) dries up? Europe would be unlikely to be willing or able to fill the even larger $95 billion annual financing gap. Yet opponents of confiscating Russia’s assets neither offer any alternatives nor address the consequences of failing to fund Ukraine.
Make no mistake: a Ukrainian defeat would bring far higher social, political, and economic costs to Europe in the form of huge refugee flows, greater security risks, and hundreds of billions of dollars in increased annual defense spending to counter the threat of Russian aggression.
Opponents of seizing Russia’s assets are not being honest with their own taxpayers about the realities of burden sharing. An accurate description of the status quo is that Western taxpayers are bearing the full burden of the war, while the assets of Russian taxpayers are being protected. This is neither morally right nor politically acceptable. But opponents have come up with plenty of weak arguments for why confiscation cannot be carried out....
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