Seize frozen Russian assets before US election, says Estonian PM

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Estonian Prime Minister Kaja Kallas said the west should seize Russia’s frozen assets before the US election, in a further sign of European concern at the impact a second Donald Trump presidency might have on the west’s policy on Russia and support for Ukraine.

“Elections are always turbulent times,” Kallas told the Financial Times on the sidelines of the Munich Security Conference. “It’s always better to do everything we can before important elections.”

The likelihood that Trump will become the Republican party’s nominee for this year’s US presidential election has spooked many in Europe, especially after he said he would tell Russia to do “whatever the hell it wants” to Nato countries that failed to spend enough on defence.

Trump’s apparent willingness to throw Nato’s mutual defence clause into doubt cast a long shadow over this year’s Munich Security Conference, an annual gathering of politicians, generals and spy chiefs.

This year’s conference was held amid growing pessimism about Ukraine’s prospects in its nearly three-year war with Russia, as the country groans under a dire shortage of ammunition that has curtailed its ability to counter Russia on the battlefield.

Western leaders say the situation has been exacerbated by Republican opposition to a new package of aid for Ukraine that has been held up for months in the US Congress.

Ukraine’s military leaders ordered their soldiers to withdraw from the frontline town of Avdiivka over the weekend. The White House said after a phone call between President Joe Biden and his Ukrainian counterpart Volodymyr Zelenskyy that Ukrainian soldiers “had to ration ammunition due to dwindling supplies, as a result of congressional inaction”.

Washington has been pushing its allies to find ways to seize the €260bn of Russian central bank assets that were immobilised in response to Russia’s full-scale invasion of Ukraine. About €191bn of Moscow’s assets are held in Euroclear, a Brussels-based securities depository.

Estonia has long advocated the seizure of the assets. But Paris and Berlin are cautious, amid concerns about legality, financial stability and possible reprisals.

Kallas said seizing Russian funds would be an additional tool that could, alongside military aid to Ukraine and moves to isolate Russia politically, help bring an end to the war. “This is economic pressure we can place on the Russian economy to hasten the breaking point of this war,” she said.

A Register of Damage was set up by the EU in The Hague last year to record evidence and claims for damage, loss or injury caused to individuals, companies and the Ukrainian state by the Russian invasion. Kallas said the frozen funds could be used to cover those losses. “If there’s anything left over we can give it back to Russia,” she said.

Kallas was speaking to the FT five days after being placed on a wanted list by Russia, the first time the Kremlin has pursued criminal charges against a western leader since launching its invasion of Ukraine.

The move was apparently connected to the Estonian government’s push to remove Soviet-era monuments. “[Russian President Vladimir Putin] wants to send a message that Estonia is actually Russian territory, and he has jurisdiction over us,” Kallas told the FT. “It’s the imperialist mindset.”

She linked the Russian move against her, which had prompted “a lot of congratulations”, with the death of Alexei Navalny, the Russian opposition leader, in a Russian prison.

“The aim is to scare me, and the western countries, to make us refrain from the decisions we would otherwise take,” she said.

She said she was not shocked by Navalny’s death. “Putin has been torturing him for a long time,” Kallas said. “It’s the playbook they always have — the dictators’ handbook.”

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