The advent of Trump means it is time to act, and seize Russia’s central bank reserves
The outcome of Donald Trump’s victory in the US elections has produced various winners and losers, with Ukraine falling into the latter category. Throughout his campaign, President-elect Trump has unequivocally stated his intention to discontinue US military aid to Ukraine. Trump’s commitment to this stance was evident in January when he instructed Mike Johnson, Speaker of the U.S. House of Representatives, to suspend the vote on the Ukraine aid package. The package was only approved four months later after former UK Foreign Secretary David Cameron made a personal appeal to Trump.
If Trump follows through on his pledge to cut off military aid, the consequences for Ukraine could be not be more dire. The United States currently provides approximately half of the $105 billion of military assistance to Ukraine. Europe is unlikely to be able to compensate for this shortfall. With the UK and most of our EU allies in the midst of budget crises, numbers of this magnitude are completely unrealistic. Therefore, with half of the assistance gone, Ukraine’s ability to defend itself will deteriorate, forcing it to capitulate.
The repercussions of such a scenario would be severe. Russia would likely occupy vast amounts of Ukrainian territory. Based on findings in previously-occupied territories like Bucha and Irpin, Ukrainian civilians would be subject to mass rape, torture and murder. Those fortunate enough to escape such atrocities would attempt to flee, leading to a humanitarian crisis of unprecedented scale. According to the United Nations Office for the Coordination of Humanitarian Affairs, as many as 12 million people could be in need of humanitarian aid, with up to 8.3 million refugees potentially fleeing Ukraine by the end of the year. Even more alarmingly, some estimates suggest that up to 15 million people could be displaced and require humanitarian assistance as a result of the war.
This potential influx of up to 15 million Ukrainian refugees fanning out across Europe would create a humanitarian disaster for the EU and UK to confront within our own borders. The scale of this crisis becomes clear when we consider that the entire population of Ukraine prior to Russia’s full-scale invasion was approximately 44 million. Such a massive displacement would strain resources, housing and public services in host countries, potentially destabilising economies and societies already grappling with the aftermath of the COVID-19 pandemic and current economic challenges.
Furthermore, an emboldened Putin would surely then test NATO’s resolve, especially given Trump’s expressed dissatisfaction with the alliance’s current structure. If a NATO country in Europe — like Estonia, Latvia, or Lithuania — becomes the next target of Putin’s aggression, there is a real possibility that the US will not come to its defence, allowing Putin to succeed in his expansionist plans for Eastern Europe.
However, this grim scenario is not inevitable. A week after Russia’s full-scale invasion of Ukraine, Western countries froze Russia’s central bank reserves. These frozen funds, totalling approximately $300 billion and distributed across Europe, the UK, the US, Japan, and Australia, could be confiscated and used for Ukraine’s defence. While there has been support for this proposition over the past two years, some pushback has arose due to concerns about upsetting international financial markets. As a compromise, an approach to confiscate only the interest, not the full amount of Russia’s reserves, has been implemented in the EU, and the G7 has formulated a plan — which is still in the process of negotiations and implementation — to use profits from immobilised assets to fund a $50 billion loan package for Ukraine. While the G7 loan provides a temporary financial buffer, it falls short of Ukraine’s fiscal and military needs. Estimates suggest that the funds will help sustain Ukraine only through 2025 by mobilising just a fraction of what is needed to pose a serious challenge to Russia.
If the US proceeds with cutting off funding for Ukraine, full confiscation of Russian central bank reserves will become necessary. We face the prospect of a massive refugee crisis and potential further Russian aggression against NATO members if Ukraine is weakened.
The need to confiscate Russian state assets for the benefit of Ukraine is no longer a theoretical discussion. It has become a matter of survival for Ukraine and the preservation of a democratic and peaceful Europe. The time for decisive action is now. Without it, we risk a weakened Ukraine, an emboldened Russia and a destabilised Europe facing an unprecedented refugee crisis. The international community must act swiftly and decisively to prevent this potential disaster and ensure the continued security and stability of the region.