Transferring frozen Russian reserves to Ukraine is elegant justice
Western allies of the nation are overstating the fears and failing to truly recognise the benefits
As Ukraine struggles to survive Russia’s relentless onslaught, the G7 countries are still debating the transfer of frozen Russian reserves to Ukraine. Some hesitate because of supposed risks to financial stability. Others assert legal worries even though prominent international lawyers have endorsed the transfer. The doubters far overstate these fears and fail to weigh the strategic benefits in the balance.
Take the fears first. Countries hold reserves for protection against macroeconomic risks, not so that they can overrun their neighbours. If the G7, including the EU, act together, other countries will not find good alternatives for investing their reserves. Some may hold gold, but it is not liquid. Even as China has encouraged the use of renminbi for its trade, countries have not been relying on China’s currency for their reserves with good reason.
