Europe may hand $218 billion of frozen Russian assets to Ukraine

As Europe mobilizes behind Ukraine, it's sitting on a $218 billion ace card — and it's being urged to play it

Transcript

00:00With the news that the US is pausing its military funding to Ukraine,

00:03there's enormous pressure on Europe to step up even more.

00:06But it does have one possible ace card, more than $200 billion of Russian assets

00:11frozen in the European banking system.

00:14The funds were frozen after the 2022 invasion.

00:17They're being held as a means to make Russia pay for Ukraine's reconstruction in peacetime.

00:22So far, nobody's touched it.

00:24The most EU leaders have done is give Ukraine loans backed by some of the interest it generates.

00:28But with signs that the US is going to stop funding Ukraine altogether,

00:32calls to actually seize the cash and use it to fund Ukraine's defence have grown.

00:36Most recently, former UK Prime Minister Rishi Sunak called for the move,

00:40along with Poland, Finland and the Baltic states.

00:42Some analysts are cautious, warning that this could spook other countries

00:45who hold assets with the EU, destabilising markets.

00:48There's also some debate about whether it's better to hold onto the cash

00:52as leverage for future peace talks with Russia.

00:54Then there's the legal side of things.

00:56Normally, a country's assets are protected from being seized by others.

00:59But some legal experts have argued, as top lawyer Paul Reichler did in Congress last year,

01:04that this protection doesn't apply when a country's actions are, quote,

01:08egregiously wrongful.

01:09Some campaigners believe that handing the money to Ukraine would strike a psychological blow

01:14to Russia at a time when its economy and its labour force are teetering.

01:17Big question, though, is whether Western leaders will actually go through with it.