On Tuesday, Russia cautioned the Western nations that Moscow would strongly resist if the United States and the European Union attempted to confiscate hundreds of billions of dollars in Russian assets. The warning comes as the G-7 foreign ministers were meeting in Japan to discuss Ukraine and other crises around the world, with Russia claiming Western “aggression” risks global catastrophe.
The US and its allies have prohibited transactions with Russia’s central bank and finance ministry, blocking around $300 billion of sovereign Russian assets in the West. The US has also been working with allies to find ways of seizing the assets and using them to help Ukraine rebuild. A senior administration official, who spoke on condition of anonymity to relay internal discussions, said the administration was generally supportive of legislation to give it more flexibility in seizing frozen assets and was in active conversations with allies on how best to do that. However, a sanctions expert at Cornell University cautioned that seizing the assets could undermine efforts to ensure longer-term funding for Ukraine.
Russia’s foreign ministry spokeswoman Maria Zakharova said any move to confiscate the assets would be “very harsh” as Russia felt it was dealing with thieves. She added that Moscow was considering its response to such a move.
Ukraine’s government has called for the resumption of talks with Russia to address security issues and restore trade links, but the Russian side has so far declined. The Ukrainian economy is on the verge of collapse, and many citizens struggle to feed their families. The country has been battered by months of Russian shelling and is in danger of a full-scale invasion from the West.
Putin dismissed as “complete nonsense” remarks by US President Joe Biden that Russia might eventually attack a NATO ally and draw the US into conflict with Moscow. He also reiterated Moscow’s claims that it has no territorial interests in Ukraine or any other countries in the West.
Across the region, nations are increasing their military spending and bolstering alliances as they prepare for a possible showdown with Russia. Estonia and the Baltic States have raised their defense spending to over 2% of their national economies. At the same time, NATO allies in Eastern Europe have expanded their presence on Russia’s borders. But despite the rising militarism, experts say it is unlikely that the confrontation will escalate to a war.
The conflict has highlighted the growing divides in the West, which have been exacerbated by political movements and events from Black Lives Matter to the 2016 presidential election. Those divisions were displayed at the Davos agenda summit, where several participants spoke about the need to tackle inequality and polarization. In contrast, others feared a dystopic future if they did not.
Putin is resurgent in the polls, with more Russians than ever saying they trust him to deal with their nation’s problems. But his critics are still convinced that a repressive regime rules the country and that the West is on a collision course with Moscow.
