“Freedom Bonds”: US Wants $50BN Bond For Ukraine Backed By Frozen Russian Assets

“Freedom Bonds”: US Wants $50BN Bond For Ukraine Backed By Frozen Russian Assets:

Leery of outright seizing all of the some $280 billion in Russian central bank assets mostly held in Europe, the Group of Seven’s alternative ‘Plan B’ is quickly taking shape. There’s been greater consensus of support for instead using the windfall profits gained from reinvesting Russian assets frozen in Europe to support the purchase of weapons for Ukraine.

Days ago the The Wall Street Journal detailed that “Two-thirds of the roughly $300 billion in reserves were sitting in European banks and clearinghouses. As those assets mature and are reinvested, they have generated profits that EU officials say could reach 15 billion euros, equivalent to more than $16 billion, over the next four years.” The blocked assets currently generate an estimated $3.6 billion of net profits per year.

On Thursday the United States unveiled a new plan to allies centered on what are being dubbed “freedom bonds”. The initiative would create a special purpose vehicle to issue at least $50 billion of bonds generated by the frozen assets, Bloomberg reports.

But considering that Moscow has already and on multiple occasions blasted such plans of the West as brazen “theft” and has even vowed to hit back in some way  investors will be understandably cautious, likely viewing a “freedom bond” scheme as anything but a secure and trustworthy long term opportunity.

The Kremlin has previously vowed to be “extremely tough” on “thieves” who appropriate what belongs to Russia“Considering that our country has qualified this as theft, the attitude will be towards thieves,” Foreign Ministry Spokeswoman Maria Zakharova earlier stated. “Not as political manipulators, not as overplayed technologists, but as thieves,” she emphasized.

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