'Unthinkable' that Russia does not pay for Ukraine's reconstruction, EU chief says

‘Unthinkable’ that Russia does not pay for Ukraine’s reconstruction, EU chief says

European Commission President Ursula von der Leyen has called it “unthinkable” for Russia not to pay for Ukraine’s reconstruction.

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European Commission President Ursula von der Leyen said on Saturday that it would be “unthinkable” for Russia not to pay for Ukraine’s reconstruction.

The EU chief told CNBC she was “disappointed” by the decision Swiss authorities took last week against using seized Russian assets to help rebuild Ukraine after the war. She insisted that Moscow would be held financially responsible for the destruction inflicted on its neighbour.

“It is unthinkable that at the very end the international community will rebuild Ukraine, and Russia will not contribute to it. It is unthinkable,” she told Hadley Gamble during the conference of Munich on security.

Swiss authorities on Wednesday ruled it unconstitutional to permanently confiscate the assets of the sanctioned Russians held in the country.

So far, Bern has moved in step with the EU to freeze the assets of Russian figures linked to President Vladimir Putin. He currently holds some 7.5 billion Swiss francs ($8.1 billion) in frozen assets.

Von der Leyen described the decision as putting commercial interests ahead of political justice. When asked if she was disappointed with the decision, she was unequivocal.

“Yes, I was disappointed,” she said. “I think it is a difficult choice to put the economic model first, because, indeed, we must have the political will that the author must also pay for the reconstruction of Ukraine.”

Von der Leyen is part of a growing chorus of European leaders who have called for new ways to make it easier to confiscate Russian assets and use them for Ukraine’s reconstruction. It has been proposed that these funds could come from assets seized either from the Russian oligarchs or from the Russian central bank.

Von der Leyen said proceedings were underway within the EU to establish a tribunal process to ensure Russia was held accountable for its actions in Ukraine. It comes as the war enters its second year.

“He must be held accountable for war crimes,” the European Commission president said of Putin.

Last year, Russia said central bank sanctions imposed by the EU and its allies had frozen about $300 billion of its foreign exchange reserves.

The IMF has estimated that Ukraine will need more than $40 billion in financial assistance in 2023 alone.

IMF Managing Director Kristalina Georgieva told CNBC earlier Saturday that a full-fledged support program for Ukraine was a few “weeks”. The deal, first announced on Friday, paves the way for talks on a comprehensive loan program that would support Kyiv’s economy and promote its bid for European Union membership.