Germany Chancellor Leading Advocate To Borrow Funds For Ukraine. Yet, Ukraine Government Keeps Germany President At A Distance Due To Russia Relations. What This Means For Visit Of Turkiye President?
Germany’s Chancellor Is Leading Advocate For Taxpayers Throughout EU And In Canada, Japan, United States, Among Others To Borrow Money For Ukraine. Yet, Ukraine Government Keeping Germany’s President At A Distance. What About Turkiye?
Olaf Scholz, Chancellor the Federal Republic of Germany, and current chair of the Group of Seven (G7) Industrialized Nations (Canada, France, Germany, Italy, Japan, United Kingdom, United States), continues to lead amongst heads of state and heads of government the effort to reconstitute a global taxpayer-funded 21st Century version of the 20th Century’s US$15 billion in value “Marshall Fund” which after World War II concluded in 1945 served from 1948 as a financial mechanism to reconstruct countries located on the European Continent, including Herr Hitler’s Germany whose crossing the border of Poland in 1939 commenced the conflict.
Chancellor Scholz prefers having taxpayers in thirty or so countries borrow a potential US$150 billion to US$500 billion to US$1.1 trillion for use in reconstructing (more accurately, according to the government of Ukraine, any funds should not be used to replicate what Ukraine had prior to 24 February 2022, rather funds should be used to create 22nd Century Ukraine; so, a Ukraine version of the United States’ “Build Back Better” using other people’s borrowed funds to achieve it) the infrastructure of Ukraine rather than use some or all approximately US$340 billion in assets of the Central Bank of the Russian Federation which have been frozen by governments.
As a former Minister of Finance of the Federal Republic of Germany, his preference for borrowing rather than using cash-on-hand is inexplicable. On 25 October 2022, Chancellor Scholz will host a Ukraine-focused reconstruction conference in Bonn, Germany. The government of the United Kingdom (England, Scotland, Wales, and Northern Ireland) plans to do the same in 2023. Politicians are giddy when discussing spending, not so much when discussing paying for it.
Will be instructive to watch how Chancellor Schulz and particularly Joe Biden, President of the United States, engages in linguistic contortions worthy of a circus performance when explaining why they have authorized the electronic transfer of billions of dollars to the Central Bank of Russian Federation. For the United States, the amount will be approximately US$38 billion.
If they and their head of state and head of government colleagues successfully convince their respective legislatures, voters, and taxpayers as to the wisdom of re-imbursing the government of the Russian Federation for its attack upon Ukraine, then they should be nominated for and be awarded the Nobel Prize in Literature and Sveriges Riksbank Nobel Prize in Economic Sciences. Perhaps too, they will send the prize money received to the Central Bank of the Russian Federation. NOTE: The Kingdom of Sweden, the country within which the prizes are awarded annually, is seeking to become a member of the thirty-country North Atlantic Treaty Organization (NATO).
The Central Bank of Ukraine has a reported approximately US$23 billion in reserves which should be near exhausted prior to the delivery of outside resources for reconstruction. Yes, say the elected politicians and the appointed officials: borrow first rather than use what is available in a checking account. That certainly makes sense to politicians- because money to them is like crack cocaine to a crack addict- they don’t care where the drug has come from as long as its available and they believe a benefit from credit for providing it.
Officials of the Federal Republic of Germany have again confirmed frustration in their multi-month-long effort to coordinate a visit to Ukraine by Frank-Walter Steinmeier, President of the Federal Republic of Germany. According to the officials, Volodymyr Zelenskyy, President of Ukraine, believed more important than a visit by the head of state to “send a message” to the leader of 84 million citizens residing in the commercial, economic, and political nuclei of the twenty-seven member European Union (EU). That message: President Steinmeier is too close to the Russian Federation and the Federal Republic of Germany has not done enough for Ukraine. Yes, an intelligent strategy: Ukraine is at war, economy in tatters, no global sanctions unanimity, so institute a litmus test for whose assistance is welcomed.
None visited from 24 February 2022 to 14 March 2022, but since 15 March 2022 eight presidents (one twice), nine prime ministers (one twice), and two chancellors have visited Ukraine.
What then, is President Zelenskyy’s true attitude toward the Republic of Turkiye and its head of state, Recep Tayyip Erdoğan? Probably uncomplimentary given Turkiye’s pre-24 February 2022 expansive commercial, economic, and political, relationship with the Russian Federation and Turkiye’s post-24 February 2022 continuing (and expanding further) commercial, economic, and political relationship with the Russian Federation.
President Erdogan meeting on multiple occasions with Vladimir Putin, President of the Russian Federation. President Erdogan continuing Turkish Airlines operations to Moscow. President Erdogan welcoming tourists from the Russian Federation. President Erdogan expanding financial transactions with the Russian Federation. President Erdogan accepting approximately US$20 billion pre-payment for construction of a nuclear power plant. President Erdogan not embracing fulsomely sanctions imposed by the EU, United States, and other countries upon the government of the Russian Federation and individuals subject to Russian Federation jurisdiction. President Erdogan continuing to purchase energy products from the Russian Federation.
And the most egregious? President Erdogan implementing restrictions upon vessels of the armed forces of the Russian Federation transiting the Bosporus to the Black Sea and Sea of Azov. President Erdogan offering and then hosting negotiations by representatives of the government of Ukraine and the government of the Russian Federation. President Erdogan presiding at the signing of a four-way agreement (Russian Federation, Turkiye, Ukraine, United Nations) relating to the transportation of agricultural commodities from ports in Ukraine to destinations throughout the world.
Are the decisions by the government of Turkiye self-serving? Yes, they must be because that is what a government does- first define the interests of its citizens and then implement decisions to achieve those interests or at a minimum protect citizens from the worst possible outcomes.
Five months after the armed forces of the Russian Federation invaded territory of Ukraine, there exists a landscape where the armed forces of the Russian Federation have approximately tripled under its control (some of which has thus far established what resembles permanence) the percentage of territory of Ukraine- from approximately 7% prior to 24 February 2022 to approximately 19% as of 29 July 2022.
While there remains a collectively-nuanced unanimity that the armed forces of the Russian Federation should immediately withdraw to the pre-24 February 2022 borders of Ukraine and to the pre-2014 borders of Ukraine, meaning out of the Crimea Peninsula and Donbas Region (Donetsk Oblast and Luhansk Oblast), the more permanence in how the map of Ukraine is portrayed, the less intent will be for those outside of Ukraine to believe they should sacrifice for Ukraine. If there is movement, people notice. Lack of movement and people look to where there is movement.
The Government of Ukraine should not be embracing “selective engagement” based upon a “purity” test as to whether and what type of commercial, economic, and political engagement a government of a country and citizens of a country had or continues to have with the Russian Federation. Conditioning support is self-defeating. No country’s taxpayers must support Ukraine. Ukraine demanding support is equally dissuasive for many- particularly as governments have domestic issues which impact first their taxpayer’s ability to earn money and to save money. Only when those obligations are achieved do governments look outward to help others, like the worthy approximately 43 million citizens of Ukraine.
Bloomberg
11 August 2022
Germany will host an international conference in Berlin in October on how to organize the reconstruction of Ukraine following Russia’s invasion, according to people familiar with the matter. Chancellor Olaf Scholz, who currently chairs the Group of Seven most industrialized countries, plans to co-host the event with European Commission President Ursula von der Leyen to plot the way forward to rebuild large parts of Ukraine’s infrastructure, the officials, who spoke on condition of anonymity, told Bloomberg on Thursday.
The preparations are still ongoing, and the exact date might still be subject to change. But so far Germany has earmarked Oct. 25 for the date that experts and representatives from the European Union, G-7 and international organizations will convene in Berlin, the people said.
EU officials have said the 27-nation bloc, which at a leaders summit in June formally accepted Ukraine as a candidate for membership, will contribute the bulk of overall financial assistance, a volume that could surpass 500 billion euros ($517 billion). However, it will likely be a thorny debate for EU member states, as there’s no agreement yet over how to raise the funds.
In contrast to an international donors conference held in the Swiss city of Lugano in July, the conference in Berlin will focus more on the question of how to best spend the unprecedented sums of reconstruction aid, the officials said.
Scholz told journalists on Thursday that the reconstruction package for Ukraine will be bigger than the Marshall Plan, which helped rebuild western Europe after World War II. “The damage is dramatic, it will cost billions and will require the entire global community to develop reasonable solutions,” Scholz said. “It will be a big, big task that has little to do with the Marshall Plan. It will be bigger.”
Germany and its EU allies are currently discussing how to structure a promised 9 billion euro emergency aid package for Ukraine. So far, the bloc has only managed to agree on an initial tranche that covers a ninth of that target that has been issued as a loan. Germany argues that highly indebted Ukraine needs the emergency aid in the form of non-refundable grants and not as loans, which would only exacerbate Kyiv’s debt burden. Berlin expects EU member states to unleash the remaining 8 billion euros of short-term aid for Ukraine by September, one of the officials said.
The German government is confident that EU member states will find a compromise deal in the coming weeks and that at least parts of the package will be issued as non-refundable grants. That would be in line with recommendations of the International Monetary Fund and along the lines of financial aid provided by other G-7 allies such as the US.
Reuters
15 June 2022
BERLIN (Reuters) - Some 4.48 billion euros ($4.67 billion) worth of Russian assets are currently frozen in Germany after European Union countries earlier this month agreed on their sixth package of sanctions against Moscow, German Finance Minister Christian Lindner said. “Among those are central bank deposits, corporate shareholdings and other assets," Lindner told journalists on Wednesday.
Euractiv.com
17 May 2022
Germany open to Russian Central Bank asset seizure to finance Ukraine’s recovery
“I am politically open to the idea of seizing foreign assets of the Russian Central Bank. We are already having this discussion in the G7 and the EU, and there are proposals on the table,” Lindner told four European media. [Clemes Bilan/EPA]
German finance minister Christian Lindner has indicated his support for the idea of seizing foreign assets held by the Russian central bank to rebuild Ukraine following the war. Around $300 billion in Russian gold and forex reserves have been frozen across the globe so far – $100 billion in the United States alone.
“I am politically open to the idea of seizing foreign assets of the Russian Central Bank. We are already having this discussion in the G7 and the EU, and there are proposals on the table,” Lindner told a group of European media outlets in an interview on Tuesday (17 May).
“For private assets, we have to see what is legally possible. We have to respect the rule of law, even if we are dealing with Russian oligarchs,” he added. The discussion surrounding the confiscation of assets of the Russian Central bank is gaining traction ahead of the meeting of the G7 finance ministers on Wednesday and Thursday.
EU and US task forces have confiscated a growing number of yachts, mansions, bank accounts, helicopters, and artworks owned by Russian oligarchs sanctioned by the West. As of April, the EU has already seized €30 billion in private assets linked to blacklisted Russian and Belarusian individuals. However, the frozen assets of the Russian Central Bank have so far not been touched. The idea to use the frozen assets to rebuild Ukraine has already surfaced in various EU institutions. Last week, the European Parliament called on the European Commission to use seized assets to fund the Ukrainian Army and to reconstruct Ukraine.
Similar calls have been voiced by EU chief diplomat Josep Borrell as well as President of the European Council Charles Michel. “Personally, I am absolutely convinced that this is extremely important not only to freeze assets but also to make possible to confiscate it, to make it available for the rebuilding of the country (Ukraine),” Michel told the Interfax-Ukraine news agency on 5 May.
The European Commission published a post-war recovery plan for Ukraine in early May. According to Ukrainian authorities, around $600 billion is needed to rebuild the country, which is why transatlantic policymakers are eying the $300 billion in frozen assets of the Russian Central Bank. However, the idea is not without critics.
The step to confiscate the money of the Russian Central Bank is “seductive”, but also “unnecessary and unwise,” two senior fellows at the think tank Bruegel, Nicolas Véron and Joshua Kirschenbaum, argued in a blog post. “The Bank of Russia’s reserves are public money, and thus altogether different from though occasionally conflated with the frozen assets of sanctioned Russians,” they argue. Furthermore, the move would do little to help Ukraine and bears “unnecessary risks to the strength and stability of the international financial system;” they added.
