30 – #MakeRussiaPay – The Strategic Necessity of Seizing Russian Assets for Ukraine’s Victory

00:00:00: Welcome to Berlin Side Out, the podcast that takes an expert look at how Germany sees the

00:00:05: world and the world sees Germany with me, Benjamin Tallis.

00:00:09: And me, Aaron Gashburnett.

00:00:12: Hello, and welcome back to Berlin Side Out.

00:00:17: The Foreign Affairs Podcast in association with the German Council on Foreign Relations

00:00:22: that takes an expert look at international politics from Berlin.

00:00:26: I'm Aaron Gashburnett, a journalist and security analyst, and I'm here with my friend and

00:00:30: co-host Benjamin Tallis, senior research fellow here at the Council and head of its action

00:00:35: group, Sight & Venda.

00:00:36: And we are coming to you from Berlin ahead of the Ukraine Recovery Conference from June

00:00:41: 10th to 12th for part two of our Pillars of Victory special.

00:00:45: Now Ben, in part one of the special, we discussed what's needed for Ukraine's military victory

00:00:51: on the battlefield with Ben Hodges, Oleksandr Daniluk, Eva Daldor and Terry Schultz, and

00:00:56: one of the big themes that came out of that conversation is that we really haven't tried

00:01:00: to win yet, as Ben Hodges said.

00:01:02: We haven't really committed to Ukraine's victory.

00:01:05: So we're having a recovery conference without a commitment to victory.

00:01:09: Isn't that putting the cart before the horse a bit here?

00:01:13: It is, Aaron.

00:01:14: And I think one of the problems here is that recovery is such a nebulous term that it provides

00:01:19: a political safe space for politicians who don't want to discuss the need for victory.

00:01:24: They don't want to discuss the hard military realities of what needs to be done to win

00:01:29: in Ukraine.

00:01:30: So while recovery will at some point be necessary, we're putting the cart before the horse, as

00:01:34: you said, if we talk about recovery without really committing to victory.

00:01:38: And it's notable that a lot of the Ukrainian experts as well as the strongest advocates

00:01:42: from Ukraine for Ukraine say, how do you help Ukraine recover?

00:01:46: Well, you give air defense and you give the offensive weapons that will get Russia off

00:01:50: Ukraine's territory.

00:01:51: And that's something that has to be clearly put together in a strategic way with any future

00:01:56: plan that we have.

00:01:57: And it's clear, as we've said many times on season two of "Bird Inside Out" that as

00:02:01: long as it takes, simply won't cut it.

00:02:03: Nor, frankly, will whatever it takes, because it doesn't define what the "it" actually

00:02:07: is.

00:02:08: And defining that goal, which will then help us define the means to achieve it, is central.

00:02:12: And that goal has to be to win.

00:02:14: So we need to understand, as Ben Hodges and Terry Schultz and others said on our last

00:02:18: episode, we need to understand how we're going to get Russia out of all of Ukraine's

00:02:22: territory, how we're going to get Ukraine into NATO, how we're going to create a stable

00:02:26: security order in Europe that serves our values as well as our interests.

00:02:31: Now we've been discussing previously what's needed to achieve that military victory on

00:02:36: the battlefield.

00:02:37: And Ben Hodges was very clear that road to that victory runs through Crimea.

00:02:41: But there's more to Ukrainian victory or to a successful strategy than the military

00:02:44: dimensions alone.

00:02:46: And this is a war that's being waged on many fronts, isn't it, Aaron?

00:02:49: That's right, Ben.

00:02:50: Right now we're moving from the front lines into the back rooms on this part two of our

00:02:54: special to a fight for Ukraine and our values that's being fought on parliamentary and congressional

00:02:59: floors in the media.

00:03:01: And even over discussions in fear halls and security conferences, it must be said, we

00:03:05: are talking about this war's economic and financial front and how to win it.

00:03:10: Right.

00:03:11: That was one of the better things to come out of a minute via Kella.

00:03:13: Yeah, absolutely.

00:03:14: There are historical comparisons there, please.

00:03:16: Yes, that is very true.

00:03:18: But what started in that beer hall was a discussion that we've been having for months between

00:03:22: us and with other experts and other interested people who have a stake in seizing Russia's

00:03:28: assets to help Ukraine's victory.

00:03:31: At the beginning of this war, the G7 states froze around $300 billion worth of currency

00:03:35: reserves the Russian central bank holds in Western countries.

00:03:39: The G7 has said that Russia is not getting this money back unless it compensates Ukraine

00:03:44: for the damage it has caused.

00:03:46: But Russia has now inflicted almost $500 billion in damages on Ukraine by now, and that some

00:03:52: keeps growing every day.

00:03:54: Meanwhile, these assets remain frozen, sitting on the sidelines and not helping Ukraine to

00:03:59: win this war.

00:04:00: Now, they're mostly being held in Euroclear Bank and Belgium and correspondent banks

00:04:04: in different countries and in different currencies.

00:04:08: About 8% is held in American dollars, 9% in Canadian dollars, 16% in British pounds, but

00:04:13: Europe's, and by extension Germany's special responsibility on this question, is very clear

00:04:18: because 63% is held in Europe's.

00:04:21: Now, later this week, we have a G7 summit in Italy where some sort of decision is expected

00:04:27: on how to use those frozen assets to help Ukraine.

00:04:31: While the US, Canada, and the UK favor just confiscating all $300 billion, European governments

00:04:37: including Germany's are reluctant.

00:04:39: And that's why we hosted a very full and well attended parliamentary breakfast just last

00:04:44: week with members of the Bundestag from all four of Germany's Democratic parties.

00:04:49: One of our guests today, Julia Siskina, was also on that expert panel, our co-hosts including

00:04:54: Green MP and Action Group members Sebastian Schaefer, as well as our Seus U. co-hosts,

00:04:59: Wolfgang Steffinger, were both in German media last week, alongside myself talking about

00:05:04: the need to confiscate the whole $300 billion.

00:05:07: You can find those articles in our show notes, but Ben, you were at that breakfast.

00:05:11: What were your impressions of where we're at right now on seizing these assets and how

00:05:16: does that play into our overall strategic picture?

00:05:19: Well, first of all, it's really important to emphasize this cross-party support that

00:05:23: was shown for seizing the full amount of the assets from the SPD, from the Greens, the

00:05:29: CDU and CSU, as well as the Liberal-Free Democrats.

00:05:33: There were several MPs from each of those parties there who really get it.

00:05:36: They understand very clearly that we've already won the legal and economic arguments.

00:05:40: Seizing the full amount of assets is legally feasible.

00:05:43: It's economically viable, but it's not yet actually generated the political will behind

00:05:47: it in Germany to make it government policy.

00:05:50: And that's because we're missing the strategic picture.

00:05:54: We tend to overcomplicate these things sometimes, and some of those convoluted solutions that

00:05:59: we'll discuss later in this episode seem to be very complicated ways of trying to avoid

00:06:04: doing the right thing.

00:06:05: And it's worth remembering what Ronald Reagan said that we heard from Matt Krainig back

00:06:09: on a previous episode that some of these very complex issues can actually be made very simple

00:06:13: if you really think them through.

00:06:15: Ultimately, it's a question of we win, they lose.

00:06:18: And if victory in Ukraine is in our interest, if deterring Russia is in our interest, then

00:06:22: we need to seize the assets to demonstrate the resolve that we need in order to not only

00:06:26: win in Ukraine, but to secure ourselves in future.

00:06:29: Why is that?

00:06:30: It's because we're not only in a battle of forces, we're in a battle of resolve.

00:06:34: We have to demonstrate that necessary resolve that we are committed to actually defending

00:06:37: our interests.

00:06:39: When it's so clearly in line with our values in Europe, this war, let's be very clear,

00:06:43: affects Europe more directly than it affects the US.

00:06:45: And if we can't get our act together on this, it sends the worst possible signal about our

00:06:49: viability in defending the kind of lives that we want to live in future, the kind of order

00:06:54: that would allow that.

00:06:55: It shows that we have the political will to seize the assets, to fund Ukraine's victory,

00:06:59: but also to make Russia pay.

00:07:01: And that's about setting the kind of precedent that we need, as well as setting the kind

00:07:04: of strategy that we need to win the systemic competition and ensure that Europe has a democratic

00:07:09: and free future.

00:07:11: And so today we're privileged to have joining us, a very international panel of four guests,

00:07:15: all of whom are working to change that.

00:07:17: First up, we have Halina Janchenko.

00:07:19: She is a member of parliament in the Ukrainian Vrkhovna Rada and secretary of the National

00:07:24: Investment Council of Ukraine.

00:07:26: Next up, welcome to Robin Wagner, the chair of both the German-Ukrainian parliamentary

00:07:30: friendship group in the Bundestag and the German delegation to the OSCE parliamentary assembly,

00:07:35: among the many hats he wears as a member of the Bundestag for the German Greens.

00:07:40: And jumping across the Atlantic, joining us from Washington, Julia Suskina, a senior

00:07:44: legal fellow with Razum for Ukraine, who has worked with Senator Ratna Omadvar on the Canadian

00:07:49: legislation for seizing Russian assets.

00:07:53: And Julia was most recently one of the main legal minds behind the American Repo Act,

00:07:58: which allows the president to order the seizure of Russian assets denominated in US dollars.

00:08:03: We'll be speaking with the senator about the Canadian legislation later in the show.

00:08:08: But first off, welcome to the show, everyone.

00:08:10: Halina, let's start with you.

00:08:12: What kind of difference would seizing and transferring these Russian state assets make

00:08:16: for Ukraine?

00:08:17: What could Ukraine do with this money and what are or should be the priorities?

00:08:21: Well, Ukraine has a number of priorities.

00:08:24: And actually, the damage that Russia has caused to Ukraine is huge.

00:08:30: It's enormous, and they continue actually damaging our infrastructure.

00:08:34: I'm talking about all sorts of damages starting with residential buildings, when people are

00:08:39: losing homes, when people are losing actually a place to live, and ending with some major

00:08:46: and vital parts of infrastructure like energy and heating infrastructure.

00:08:52: And actually, I should tell you one thing that I should tell you about the process of not

00:08:58: just freezing, but actually seizing their assets.

00:09:02: It's a very important source of resources for recovering of Ukraine, but also for the

00:09:07: current military and financial assistance.

00:09:11: That's number one.

00:09:12: But second part that we should clearly understand that this is a very important political message

00:09:19: that if Russia continues messing with Ukraine, if Russia continues destroying Ukrainian infrastructure

00:09:25: and just in March, they destroyed a number of huge electricity stations, then they will

00:09:31: be forced to pay.

00:09:33: And maybe, although I really doubt that Russians still have some logic, but nevertheless, maybe

00:09:38: that will give them a sense of what they are doing and who will pay for it and should they

00:09:45: continue basically messing with Ukraine and damaging the infrastructure.

00:09:50: So there are two functions, two very important functions.

00:09:55: As I said, one practical, one very symbolic, but both of them making a huge difference

00:10:01: and sending a big signal to Russia, but also to all authoritarian regimes across the world.

00:10:08: I just came from Washington, D.C. this week.

00:10:12: I spent a whole week there.

00:10:14: And actually, I should tell you that, for example, Americans, they feel some tension

00:10:22: not only about Russia, but actually about the whole so-called axis of evil, about the

00:10:29: countries that are likely or thinking about messing with their neighbors.

00:10:35: I'm talking about China and Taiwan.

00:10:36: I'm talking about what is going on in the Middle East.

00:10:39: And this is only to start with.

00:10:41: So actually, it's very important for Western democracy to send a very clear and tough message

00:10:49: to those authoritarian regimes.

00:10:52: If you mess with your neighbors, if you mess with other countries, you will pay.

00:10:56: Right.

00:10:57: Exactly.

00:10:58: That's such an important signal to send that there would be justice.

00:11:01: There would be accountability.

00:11:03: You don't get away with doing this kind of stuff.

00:11:05: But Robin, coming to you a second, this point about what the money would be used for.

00:11:10: In Germany, we tend to hear this debate couched in the language of reconstruction.

00:11:14: And as Halina mentioned, there will be plenty to do on reconstruction.

00:11:17: It will be extremely important.

00:11:19: But that's something of a political safe space for discussion.

00:11:23: Shouldn't we be talking about this in terms of seizing that money to fund Ukrainian victory?

00:11:27: I think, first of all, we should start thinking not only about Ukrainian victory, but we should

00:11:32: start thinking about our common victory as we are together under attack by Russia.

00:11:37: And I think this is the biggest problem in all the debates we have.

00:11:40: And we are still thinking in the Western countries that we are helping Ukraine out of

00:11:44: charity or out of friendliness to an attack democracy.

00:11:48: But forgetting that we are also under attack right now in Germany, we have those news about

00:11:55: Russian spies working together with our far-right wing party here in Germany, for example.

00:12:01: We have Russian murderers taking place in European Union countries.

00:12:06: We have destabilization, disinformation.

00:12:08: All this is happening.

00:12:09: And the Ukrainian people are on the front line of this battle of the Russian dictatorship

00:12:15: against our democracies.

00:12:17: They are paying with their lives for this fight.

00:12:19: So we should be in this fight together with them and we should have this mindset for this

00:12:25: whole debate.

00:12:26: And then we could come to the other questions of what we use the money for and also which

00:12:30: money do we use and what are the obstacles to that.

00:12:33: But first of all, we have to change this mindset.

00:12:35: Right.

00:12:36: As we often say on the show, Aaron, the goal defines the means, doesn't it?

00:12:39: Absolutely.

00:12:40: And actually that brings me to one question I have for all of you for the entire panel

00:12:44: because when we're talking about going from as long as it takes to whatever it takes and

00:12:51: really changing our mindset to be fully in this fight in support of Ukraine, not just

00:12:56: out of charity, but out of the fact that it is in our strategic interest, that comes

00:13:01: down to a question of are we willing to do everything we possibly can do to help Ukraine

00:13:06: win here.

00:13:07: So when it comes to the question of seizing assets, the repo act in the US as well as Canadian

00:13:13: legislation allows those governments to seize Russian state assets denominated in US or

00:13:19: Canadian money.

00:13:20: Yet right now we're hearing a lot of chatter about whether the G7 will actually seize the

00:13:25: entire asset, whether it will go as far as it needs to go, as it could go.

00:13:31: Instead, we're hearing talk of some sort of creative solution, which would only see the

00:13:36: interest transferred to Ukraine or allowing the asset or interest to be used as collateral

00:13:42: for Ukraine to borrow money against.

00:13:44: So why do you think the G7 are doing this rather than just going with the simplest and

00:13:51: most obvious solution right from the get-go, which would be the most likely to actually

00:13:55: contribute to Ukrainian victory, which is to simply seize the entire asset?

00:14:00: I mean, why is it important that we do that?

00:14:03: All of these creative solutions, as Erin eloquently called them, arose as a result of the mistaken

00:14:10: view that sovereign immunity basically means that you can't touch Russia's money.

00:14:15: That's not true.

00:14:16: And that misconception has been cleared up already by numerous prominent international

00:14:20: operatic practitioners, experts, scholars.

00:14:24: But unfortunately, it's tended to linger and also because it's a very convenient excuse.

00:14:31: So all of this has led to a bit of a wild goose chase towards these various alternatives,

00:14:36: where governments are twisting themselves into principles based on misconceptions about

00:14:41: the law.

00:14:42: There's been this false red line that mainly Europe has drawn to box themselves in and

00:14:49: the rest of the G7.

00:14:51: But that line has always been imaginary.

00:14:53: Let me be really, really clear about this.

00:14:56: Sovereign assets are not inviolable.

00:14:59: That view mistakes the absolute protection of property for the rule of law.

00:15:05: So in other words, to say that sovereign assets are inviolable is also saying that waging

00:15:09: a war of aggression, committing horrible war crimes and owing billions of dollars in reparations

00:15:15: is simply irrelevant.

00:15:17: But it's not.

00:15:18: It's not irrelevant.

00:15:19: Robin, coming to you on that, I'm not sure this is something that's fully grasped.

00:15:23: Within the German political establishment at the moment, even those in the highest level

00:15:27: of government seem incredibly nervous about doing something they think still might not

00:15:32: be quite kosher according to the law, but which a lot of international experts, as

00:15:36: Julia said, it is in fact in keeping with the law and keeping up the protection of

00:15:40: law itself.

00:15:41: First of all, it's totally okay to have a thoughtful decision making process on that.

00:15:46: And actually, that is what is the difference between our democracies and, for example,

00:15:52: the dictatorship in Russia.

00:15:54: Here we have debates on that and here we have to really think about the decisions we make.

00:15:59: And I think it's totally okay to have these worries.

00:16:01: And I would also say that while this war is also about rule of law and these issues, it's

00:16:11: very relevant to clearly check what is in line with international law and what is not.

00:16:17: I'm also in the position that it is the right thing to use the whole frozen assets, but

00:16:22: I think it's quite a valid thing to prove whether this is in line with European or with

00:16:27: international law.

00:16:28: And it's also, I understand the idea of having thoughts about European financial places and

00:16:37: the investment place, for example, on that.

00:16:39: But when all the G7 is acting, I don't see the point in where the money should go, actually.

00:16:44: So this is okay, but the German Bundestag has voted on a very clear motion on that, which

00:16:54: says we should use the frozen assets.

00:16:58: And I would personally also say, and perhaps in little easier words, I do not understand

00:17:03: the point in a country invading another country, destroying whatever it can destroy, causing

00:17:10: all this damage, and everyone else has to pay for that.

00:17:13: I don't see the point in that, and I'm not actually willing to accept that.

00:17:17: I would not accept that in private life, and I don't accept that between states.

00:17:20: So it is, it should be a clear cause to make Russia pay for that.

00:17:26: I said that in the plenary, I said we make Russia pay.

00:17:29: The Bundestag voted on that.

00:17:30: And so I think we have, it's okay to have this discussion, but in the end, the cause should

00:17:35: be clear on that.

00:17:36: Absolutely right.

00:17:37: And indeed, a thoughtful debate is, as you rightly say, precisely what distinguishes democracies

00:17:42: from autocracies, which is the very values we're fighting for.

00:17:45: But when people in power in those democracies use false reasoning, use false reasons, in

00:17:51: fact, to act as excuses not to do what is needed, it sets a dangerous precedent.

00:17:56: There's often fear of setting the precedent, as you mentioned, that's been one of the arguments

00:18:01: used against what precedent would actually seize in the assets set.

00:18:04: But Aaron, this is something we've talked about a lot.

00:18:06: That seems to ignore the precedent that is set by letting Russia get away with this, and

00:18:10: the damage that could do to international law and order if we let it go unpunished.

00:18:14: Well, precisely.

00:18:15: And I think that we would, we've made this point before that inaction also sets a precedent.

00:18:20: I think that there is this belief in Germany sometimes in particular that if you, it's

00:18:25: only if you take a certain positive decision that you end up sending a precedent, but an

00:18:28: actual fact, if you don't take a decision, you'll also set a precedent.

00:18:32: And Helena, you just said this a few minutes ago in your opening, whether or not we seize

00:18:38: these assets, we'll set a precedent.

00:18:41: And do we want to set that precedent of if you behave this way, you will pay?

00:18:46: I mean, that to me sounds like a pretty clear strategic question.

00:18:52: An interesting fact that it's not a precedent.

00:18:55: Actually something that is called reparation.

00:18:58: So basically the occupant or the country which must with the neighbors should pay the damages,

00:19:05: it's not a precedent.

00:19:06: That's what actually happened around the world in the previous century.

00:19:11: So this is actually the instrument and the tool that is already there.

00:19:16: It's not a precedent actually to seize Russian money either because actually it was Canada

00:19:25: who made the first, who passed the first legislation.

00:19:29: And it was if I'm not mistaken, probably even back in 2022.

00:19:35: So basically they said that actually they can take the frozen Russian money and start

00:19:41: using it.

00:19:43: Also actually just like during the last week, Congress and Senate, then President of US

00:19:53: have actually signed yet another legislation act.

00:19:55: In addition to the hugely expected financial and military assistance to Ukraine, there

00:20:05: was another legislation act passed by US Congress.

00:20:09: It was a legislation about seizing actually Russian assets.

00:20:16: And currently according to my information, there are about $5 billion in the United States

00:20:21: that can be seized and used to actually provide assistance to Ukraine.

00:20:27: Talking about Germany, Germany has about 4 billion euros of various kind of Russian

00:20:32: assets.

00:20:33: This includes not only money of Russian central bank, but actually private assets of let's

00:20:42: call them what they are Russian oligarchs, those who are helping actually put into to

00:20:48: invade and to kill civilians, to kill like whole families in Ukraine.

00:20:53: And they also bear their part of responsibility and they also should pay.

00:20:59: So German has also something to do and it won't be even a president.

00:21:04: We understand that in many cases it's very difficult to take leadership.

00:21:11: Although when we are talking about Germany, we really expected to take leadership in Europe.

00:21:15: But in this case, Germany should not even be the first one to start.

00:21:21: Canada, United States already started this way.

00:21:26: Robin, I'd like to come to you quickly just on something that you were saying earlier.

00:21:31: You have mentioned of course that what sets us apart as democracies is that we can actually

00:21:35: have these debates.

00:21:36: But one thing that always strikes me about the German debate and it's coming up again

00:21:40: in this particular discussion about whether we see the full sort of kit and caboodle of

00:21:46: Russian assets that are available or whether we work on some sort of creative solution

00:21:50: as we've been talking about is the role of international law.

00:21:54: Often in German discussions, we tie ourselves up into thinking, oh, it's not legal.

00:21:59: And so we better not do it.

00:22:01: Whereas of course, there's different scholars that will dispute that.

00:22:04: We don't really get to the point of really saying, okay, well, why do we have this law?

00:22:08: You know, what is sort of the moral imperative that this international law is actually designed

00:22:14: to uphold?

00:22:16: Are we having this debate the wrong way?

00:22:19: That is characteristic that I like that we want to act in accordance to international

00:22:24: law.

00:22:25: I want to act according to law.

00:22:27: But acting according to law also means trying to interpret the law and trying to find out

00:22:31: what the law is about.

00:22:32: That is one of the instruments we have when dealing with law.

00:22:35: This is thinking about what is the reason of that.

00:22:38: And of course, also part of it is thinking about what do we have to change and what can

00:22:42: we change and how is the process of changing that?

00:22:46: So I think this is one part of the struggle that we want to upkeep international law in

00:22:51: all of this.

00:22:52: But on the other hand, still it is necessary to make those pay who cause the damage.

00:22:56: Right.

00:22:57: And Julia, I'd like to come to you on this in a second because you made that very interesting

00:23:00: distinction before between an absolute protection, a rigid interpretation of law and protecting

00:23:05: the rule of law itself.

00:23:06: So I'm going to come to you on that in just one second.

00:23:09: But Robin, just to follow up on that a little bit, I'm going to play devil's advocate here.

00:23:15: As you know me a little bit, then you know that's something I'm not averse to doing.

00:23:22: That desire to have clean hands is very understandable in German context, is very understandable

00:23:27: given German history.

00:23:28: But hasn't it become more than that?

00:23:30: Hasn't it become this restrictive comfort of legalism that is using the rules as a straight

00:23:35: jacket not to act for those who don't wish to?

00:23:39: Whereas we actually hear other reasons behind this.

00:23:41: We hear that Germany has a special relationship with Russia.

00:23:44: That's why this can't be done.

00:23:45: We hear seizing these assets would make us quote unquote as bad as the Russians.

00:23:50: Now that seems to me to be a striking failure in the second example to draw any kind of

00:23:54: proportionality between the two acts.

00:23:56: And in the first case, that's really worrying for what Germany's relationships, Germany's

00:24:00: interests are and it would be really worrying for Germany's allies if that were the case.

00:24:04: So while I appreciate what you're saying, isn't this being used, the good intentions

00:24:09: of that from people like yourself, it's being used by people with other motives?

00:24:13: If it is used in that direction, it would be totally wrong.

00:24:17: But once again, I think it's a good thing to have the goal to not be as bad as Russian

00:24:23: politics is.

00:24:24: I do not want to play in this moral field because this is totally unacceptable.

00:24:28: And I want to upkeep and I want to preserve the international law.

00:24:32: But we should not have that as an excuse because we need to have very clear in our minds that

00:24:38: we are in a fight of this dictatorship against the idea of democracy.

00:24:43: And we are also under attack and we have to keep that in mind.

00:24:46: And so we have to find ways on how to deal in accordance to international law, but take

00:24:51: the necessary measures to defend ourselves, our democracies and on the frontline Ukraine

00:24:58: against this aggression.

00:24:59: If there is anyone left in German politics, and I know that there are some left in German

00:25:03: politics, so say that we have this special relation to Russia.

00:25:06: We definitely still need in this country to work up the mistakes of the past we made.

00:25:11: We have to take the necessary lessons of the wrong German politics concerning Russia in

00:25:18: the past.

00:25:19: We have to learn the lessons that it's not us who understands what is Russia doing best,

00:25:23: but our neighbors in Middle and Eastern Europe who knew better in the past and maybe now

00:25:29: have the more correct assessments as well.

00:25:31: So this is part of our learning process.

00:25:33: And I urge everyone in Germany to really try to learn from the mistakes in the past.

00:25:39: It was wrong to make these mistakes, but it can happen that you make a mistake.

00:25:42: But if you do not learn from these mistakes, then you are doomed.

00:25:45: Absolutely right.

00:25:46: And crucial to that is understanding indeed we are the ones in the fight as well.

00:25:49: And if you're in a fight, you want to win it.

00:25:51: And one of the reasons you want to win it, Julia, is to maintain things like the rule

00:25:55: of law, which you mentioned before.

00:25:57: Could you talk us through a little bit that distinction that you drew a second ago?

00:26:00: Sure.

00:26:01: So I will add on to Robin's point that he's absolutely right.

00:26:05: We have had these legal debates over and over.

00:26:08: But at this point, two years later, experts have come to the realization that the argument

00:26:13: that it's illegal under international law doesn't really hold water anymore.

00:26:18: And that's also largely because there are several countries who have already legislated

00:26:22: based on the principle of countermeasures, including Canada, the US, Switzerland, and

00:26:28: Estonia.

00:26:29: So let me explain that a little bit.

00:26:32: Countermeasures are a well-established doctrine under international law.

00:26:36: This is something that already exists.

00:26:38: And if you think about it, it would be crazy to say, well, there's nothing we can do to

00:26:44: hold Russia accountable to pay the compensation.

00:26:46: We all agree that it owes.

00:26:48: But thankfully, that's not the case.

00:26:50: A state only benefits from noninterference with its property rights when it is abiding

00:26:55: by international law.

00:26:57: In this case, Russia is clearly not.

00:26:59: It's invaded Ukraine.

00:27:01: It's still in territory.

00:27:02: It's still with children.

00:27:03: And it's committed thousands of war crimes.

00:27:06: Russia doesn't now get to benefit from the rule of law for its bank account at the same

00:27:10: time as it violates every single part of it.

00:27:13: Security was never meant to have more protections than human rights or more protections than

00:27:19: international peace and security.

00:27:21: That's not international law.

00:27:23: So when Russia stops its war and when it pays the full reparations that it owes, again,

00:27:28: a requirement, then it can get this untouchability of its bank account back.

00:27:34: That is the whole principle of countermeasures.

00:27:36: It's important to understand that this is not an exception to international law.

00:27:40: We are not making an exception.

00:27:41: This is actually a core part of it.

00:27:44: So whenever these arguments do come up and opponents still claim that it's against international

00:27:48: law to transfer assets, they haven't really been able to mount a convincing argument

00:27:54: as to why that hasn't already been addressed at this point.

00:27:58: As to why this argument comes up, I do honestly agree that legal concerns are often used as

00:28:05: a get out of making a difficult decision card.

00:28:09: It's really an excuse at this point.

00:28:11: We don't really need more legal debates.

00:28:15: What we need is more political will and a cold, hard reckoning of what will happen if

00:28:21: these assets aren't used for Ukraine soon.

00:28:26: But really the bigger picture, I think, is it all boils down to one very quasi-legal

00:28:30: point, not really legal.

00:28:33: And this point is that, well, this exact same thing hasn't been done before, so therefore

00:28:38: something must be wrong with the idea.

00:28:41: This way of thinking overlooks the fact that, OK, well, we don't have an exact historical

00:28:46: blueprint, and we rarely do in history, but we do have precedent.

00:28:51: That's very analogous, as Helena mentioned.

00:28:54: And we do have well-established legal doctrines that allow for such an asset transfer.

00:29:00: It's also important to recognize that international law isn't something that's handed down to

00:29:05: us from above on stone tablets.

00:29:08: It's not written in stone.

00:29:09: It constantly evolves.

00:29:11: And what countries and states do and how they act and what they permit contributes to that

00:29:20: evolvement.

00:29:21: And the bigger question is, how do we want it to evolve?

00:29:24: And like Erin said, inaction is just as much a precedent-setting evolvement as action is.

00:29:30: Helena, you were just talking a few minutes ago about leadership, and Julia just mentioned

00:29:36: just now the role of the United States, Canadian, Estonian, Swiss legislation on setting the

00:29:44: legal precedent that, yes, this is possible because these countries have actually done

00:29:49: it.

00:29:50: What kind of leadership do we need to see here from countries that are a bit further ahead?

00:29:57: So let's go to Canada and the US for a moment.

00:30:00: They are way ahead of just about every other country when it comes to actual legislation

00:30:03: on this to allow for the seizure of state assets.

00:30:07: But both mentioned on this topic, in Canada's recent budget, there was a note of this.

00:30:13: The repo act itself seems to signal that neither country wants to really lead on this politically

00:30:18: and diplomatically, at least for the moment, but rather tie themselves to whatever G7 consensus

00:30:23: ends up being.

00:30:25: Where is the leadership on this?

00:30:27: What kind of example needs to be set?

00:30:29: Is it better to have an example set?

00:30:32: And if they were to go ahead, how do you think that would affect this debate and narrative,

00:30:38: both for Ukraine and here in Germany?

00:30:40: Well I believe they are already ahead and they already made the most important steps.

00:30:45: So basically they put this as a part of their legislation and they can actually move to

00:30:50: the practical steps.

00:30:52: The next step should actually be creation of the fund to cover these damages.

00:30:58: And once again, I totally agree with Robin who is my vis-à-vis in Germany as a chair

00:31:07: of Ukraine, German Inter-Parliamentary French Group, but also a great friend of Ukraine,

00:31:13: that it's obvious who should pay.

00:31:15: I mean it's fair.

00:31:17: It is fair that it's Russians who should pay.

00:31:20: So basically the next step voted by a global community, by United Nations General Assembly.

00:31:28: They voted that the next step should be creation of the fund.

00:31:32: And the fund obviously should be filled with Russian frozen assets.

00:31:38: So now it's time to move on.

00:31:40: And for all the countries to actually fulfill this United Nations resolution.

00:31:48: Germany have voted.

00:31:49: Yes, Robin, we're going to come to you on that because indeed the G7 is going to be

00:31:53: crucial in this process and Germany is a member of the G7, has been having trouble leading

00:32:00: in other ways on Ukraine as we know.

00:32:01: You've been one of the ones pushing for it to do more on every front, but we haven't

00:32:04: got there yet.

00:32:05: So surely this would be one of the ways where Germany could really demonstrate.

00:32:09: It is in the fight.

00:32:10: It's in it to win it.

00:32:11: How do we get there?

00:32:12: Yes, I think we should do that.

00:32:13: And the perspective on the G7 is the right one.

00:32:16: I think this is really important for this issue to have it in the G7 context because

00:32:22: even with the clear course that I have, I think the thought about what it means for

00:32:28: the financial center in the States and things like that, this is a valid argument.

00:32:33: And this argument can be countered if we act together in the G7.

00:32:40: And when concerning leadership, I think we have to think about what leadership in these

00:32:45: times means.

00:32:46: And that does not mean being the lonely wolf who walks out.

00:32:49: alone and does everything on its own. But it has to be leadership within a group and

00:32:54: trying to act within this group and working together with the others. But leadership in

00:32:58: a group does not mean to wait for everyone else to act because then no one acts in this

00:33:03: group. So someone has to take the initiative in this group. That can be Germany, that can

00:33:07: also be others in this group. But as a German politician, I would say we should be more active

00:33:13: on that. The Bundestag voted clearly and had this motion that we should use the frozen

00:33:18: assets. And so within the G7, we should move a step forward and together solve this issue.

00:33:24: This is also part of grown up politics. I think we cannot always wait for others to

00:33:29: deal with the issues. When we want to be grown up in Europe, we cannot always wait for our

00:33:33: friends on the other side of the Atlantic to take the leadership on whatever question

00:33:37: it is. I think it's very important that we are strongly together, but we also have to

00:33:43: take our share of responsibility.

00:33:45: The unity shouldn't mean lowest common denominator or always waiting for the others or settling

00:33:50: on the lowest thing we could possibly agree to. It should mean actually going forward

00:33:53: for the team purpose and actually playing as a team, letting at some leads, sometimes

00:33:57: others lead other times, play to their strengths. That's absolutely fine. But truth wins out

00:34:02: over tranquility and team play as well. And this is something that we have to actually

00:34:06: be able to prioritize. That's going to take political leadership, which is where narratives

00:34:10: are key, I think, to come into this. But we haven't yet got a narrative from the key

00:34:15: leaders in Germany, including Vice Chancellor Habeck and Foreign Minister Baerbock, about

00:34:19: seizing these assets and linking it to victory. What we've heard from both of them is that

00:34:24: they view this issue critically or that it would just be viewed in terms of the seizing

00:34:29: of the interest rather than the asset itself. Now, we've heard people on Berlin's Side

00:34:33: Out challenge that before from both the Greens and from the CDU/CSU. But, Julio, can you tell

00:34:39: us a bit more about this key role of narratives in this struggle for victory?

00:34:42: Specifically, Julio, let's ask about the repo act and also about Canadian legislation. Because

00:34:48: now that the repo act has actually passed and Canadian legislation is closer to passing,

00:34:53: are we potentially seeing the opportunity for a narrative change in how this whole thing

00:34:57: is framed?

00:34:58: Yes, absolutely. And I'm very glad you asked about that. So I will start with the repo act

00:35:03: since that's probably what I'm most familiar with and it's the most recent development.

00:35:07: So, yes, the repo act does absolutely change the narrative in several really important

00:35:12: ways. First, it redraws these false red lines that were set by Europe. It legitimizes the

00:35:18: use of countermeasures to seize and transfer the assets themselves rather than pursue these

00:35:24: creative strategies whose whole purpose is to avoid touching the assets. It shows that

00:35:28: seizing the assets is possible. And it's also the best way legally and practically to deliver

00:35:34: the greatest amount of benefit to Ukraine and therefore to the entire global world in

00:35:40: the fastest way. It shows that it's possible to create legal mechanisms if they don't already

00:35:45: exist. So it erases this excuse of, oh, well, we don't have the law for that. Well, then

00:35:51: make one. That is the job of a lawmaker. So, yes, the repo act does change the narrative.

00:35:58: So it is the Canadian legislation and it also exposes all of these excuses about international

00:36:05: law. It makes them more and more glaringly existent. It explicitly asserts the legality

00:36:12: of doing this as a countermeasure against Russia's grave breach of international law.

00:36:17: And what's really important is that it was passed unanimously with the support, in other

00:36:22: words, of lawmakers from all member countries in Europe and from all of their political

00:36:26: families. So in other words, the governing parties of all EU countries have voted for

00:36:32: illegal and political position that some of their governments are trying to resist. That

00:36:37: is an incredibly important message. So what, in terms of narrative, what this really means

00:36:43: is that the position of EUG7 countries is unsustainable. It would serve them better at

00:36:50: this point to realize this and to act accordingly rather than be shamed into it by inevitable

00:36:55: public pressure once others act like the US and Canada.

00:36:59: Right. And this is something we've also talked a lot on the show about is that these things

00:37:04: will happen, largely speaking. They will go ahead in that way. So trying to get ahead

00:37:09: of that and do this strategically in a proactive manner would be much more in our interest

00:37:15: and would actually be much more to the interest of the politicians who did it rather than

00:37:18: claiming it's impossible until it becomes inevitable and then acting in an unplanned

00:37:24: fashion that makes us look completely hopeless before our electorates as well and doesn't

00:37:27: exactly signal the resolve that we need and it doesn't signal to our populations that

00:37:31: we've got this. We're in charge. We're in control. We're ready to win a systemic competition

00:37:35: against authoritarian regimes. So I think some of the crisis of political legitimacy

00:37:39: that we're seeing in the West is partly related to this failure to accept actually what are

00:37:45: strategic inevitabilities and to really claim them and take ownership of them. But that's

00:37:49: something, Helena, that Ukraine has been incredibly good at doing. Ukrainian leaders

00:37:52: have been incredibly good at getting ahead of the game on this and continuing to push,

00:37:57: be it in narrative terms, be it in ways of appealing to the conscience of the West and

00:38:01: so on, to appealing to the times when Western countries have been at their best actually

00:38:05: and have lived up to their values and have served their interests. But at the same time,

00:38:10: we now start to see difficulties in Ukraine continuing to push forward. Can you tell us

00:38:15: a little bit about how that feels and why the fight for victory in Ukraine must go on

00:38:21: and what message you would deliver to our listeners around European countries and across

00:38:26: the Atlantic as to why Ukraine must win?

00:38:29: One thing that I really want to say, that I want to be heard, that for Ukraine it's

00:38:36: very heartbreaking that we managed to get additional, for example, military assistance

00:38:43: or additional legal or political tool on a table only after actually new strategy in

00:38:54: Ukraine or atrocities or stuff like that. We've been begging for military assistance,

00:39:00: like for serious weapon to protect ourselves since the beginning of full-scale invasion.

00:39:08: But only after April, after Russians left from the Northern regions and when the whole

00:39:13: world saw all those, not only that, but tortured people laying on the streets, that's what

00:39:19: Russians did to civilians. Only after that some activities have started, like talking

00:39:27: about the recent activities. In March, Russians have started basically ruining and destroying

00:39:34: the huge energy stations in Ukraine. There was this one energy station. It just says

00:39:44: that the air alarm in Kiev is out. So we are kind of safe again. But that's the typical,

00:39:52: that's our routine, that's how we live. So actually there was an air alarm. But nevertheless,

00:39:57: so Russians have actually ruined the huge electricity plant that supplied energy to

00:40:06: three regions, including Kiev, but to other major big regions. And only after that some

00:40:16: activities have started taking place related to air defense. So American Congress finally

00:40:25: voted the military assistance, the $61 billion. And we also see, we are very thankful, but

00:40:33: it is kind of like a delayed assistance from Germany as well.

00:40:38: Well exactly, this is an argument we've actually made quite a lot on the show and here in Berlin,

00:40:42: why was it that Ukrainians had to wait for Butcher to happen in order to get artillery?

00:40:47: Why did Mariupol have to be raised to the ground in order for Heimars to be sent? And

00:40:51: we see it again this time. What has triggered the passing of the Ukraine aid bill, but an

00:40:55: Iranian attack on Israel? Let's be frank, this is actually what tipped this over the

00:40:59: edge. So another total strategic fail from the collective West, from the democratic world,

00:41:04: we're letting our enemies, our adversaries, the enemies of freedom set the agenda. We

00:41:08: are clearly on the back foot and playing catch up. So we need to start getting ahead of that.

00:41:13: And it's therefore very unfortunate that in Germany still the conversation revolves around

00:41:19: questions like what if Kharkiv were to suffer the same fate as Mariupol? Would that move

00:41:24: Olaf Schultz to send Taurus? And it's totally the wrong way of looking at this, of course.

00:41:29: I actually personally think it wouldn't because I don't think it fits with Schultz's strategic

00:41:33: logic. But nonetheless, even thinking about it in those terms is totally, totally wrong,

00:41:37: I find. Yulia, could you just tell us a little bit about that strategic situation in Washington

00:41:42: and the passing of the act? Because you've been on the ground there.

00:41:46: Yes, I completely agree with Halina. That's very glad that it passed. Finally, it took

00:41:52: eight months of long sustained effort of trying literally everything on the hundreds of congressional

00:41:59: meetings. An entire Ukrainian Action Summit where 500 Ukrainian American delegates flew

00:42:06: in from 47 states across the country for a weekend to meet with their congressional representatives

00:42:12: and to advocate for Ukraine aid. And just so much more, discharge petitions, media campaigns,

00:42:19: putting up billboards, news ads. This was a monumental effort for something that should

00:42:25: be very obvious. And in the end, bringing it back to the seized assets, I believe it's

00:42:32: the same. The seized assets are is going to be the same in the long list of decisions

00:42:37: around javelins, MiG-29s, T-72s, high-mars, leopards, F-16s, all of those things. Our

00:42:45: Western decision makers try and avoid doing the obvious. But eventually they're left

00:42:50: with no choice but to do what they need to do. But it's always too little and it's too

00:42:56: late. And Ukraine always pays in the blood of its brave soldiers and its innocent civilians.

00:43:03: At the very core, it really boils down to the fact that our decision makers consistently

00:43:07: fail to understand the threat from Russia and the risks if Ukraine is allowed to fail.

00:43:12: I think Europeans still in particular still haven't woken up to the fact that we are far

00:43:15: more directly exposed and drastically vulnerable to a continued Russian threat. That if we

00:43:21: don't defeat that in Ukraine, it can be coming for us. And is it then going to be again a

00:43:25: case of us saying, oh, we really need to rearm ourselves when one of the Baltic states is

00:43:29: attacked or when a city in Poland suffers the same fate as Mariupol or when the missiles

00:43:34: start landing on Munich? And this is the thing. If we're still having this too late

00:43:39: approach, if we're not ahead of the game, that's precisely what we risk. And I think

00:43:42: that's the stakes we have to be laying out in front of our decision makers. But Aaron,

00:43:46: there's more to this than just military rearmament. There's an economic front as well as we discussed

00:43:51: at the beginning, isn't there?

00:43:52: Absolutely. And that's precisely where this whole question of seizing the assets actually

00:43:58: comes in. It's this question of who should pay for this? Obviously, Russia should pay

00:44:02: for this. And it's irresponsible, as we've said many times, to leave Russian money on

00:44:09: the table when Ukraine continues to pay in blood, obviously, as Julia just said, but

00:44:12: also that the Western taxpayer continues to be on the hook for supporting Ukraine, which

00:44:19: is in our interest, let's be clear. But at a time of economic uncertainty, it's quite

00:44:29: strange that we are leaving this money on the table, which as Julia has mentioned, we

00:44:33: can legally take and transfer to Ukraine. And the longer we put off this decision, as

00:44:41: you've said, Ben, the more likely it is that the result will be more expensive, that we'll

00:44:46: actually have to spend more and more money on defense because the Russian threat will

00:44:51: become ever, ever closer to home for us. So this seems to be a rather no brainer decision

00:44:59: question. One thing we do hear in addition to some of the legal counter arguments is

00:45:04: economic counter arguments, which Robin has addressed a little bit that can be mitigated

00:45:09: by moving forward as the G7. And that's why he favors this. But there's concerns, of course,

00:45:15: that if we were to seize the assets, that there would be the potential to destabilize the

00:45:21: euro or any other Western currency or create the possibility for Russia to retaliate. Now,

00:45:28: let's be clear here, Western currencies that the G7 has jurisdiction over make up 89% of

00:45:33: currency reserves in the world. So I'm always very skeptical of this particular argument.

00:45:37: Let's be frank there. But Julia, Helena, what do you make of these arguments?

00:45:42: Prominent economists and experts have already shown that these concerns are largely overblown

00:45:47: and they're kind of a scaremongering tactic for the reasons that Aaron explains is that

00:45:51: if the G7 moves together, this is 89.2% of the world's reserve currencies. There's literally

00:45:57: no place else to go. The other reason is that any negative effects that would have happened

00:46:03: from taking these reserves would have already been triggered when the G7 froze those assets

00:46:09: in early 2022. That is arguably the bigger move. But there have been no observed consequences.

00:46:17: And this is this because the G7 by freezing those reserves and stating that they will

00:46:22: remain frozen until Russia pays a sum that is greater than the amount that they're holding,

00:46:27: they've already made it clear that aggressors reserves are not safe in the G7 and nor should

00:46:32: they be. I think the bigger point to I will make is that the bigger risk on this reserve

00:46:38: currency front is not necessarily the financial component and it's really been framed in this

00:46:45: economic financial way. But the bigger risk is if the West fails to adequately fund Ukraine

00:46:52: that results in it losing the war or not being able to sustain itself. That would actually

00:46:57: be a bigger seismic hit to the security of Europe where inevitably Russia will invade

00:47:03: next. And this would deplete confidence not in just the Euro, but in the stability of

00:47:08: Europe itself. So in the end, Euroclear and the banks should not be the decision makers

00:47:15: here. This isn't a financial decision. It's a national security decision. And it's one

00:47:21: that really should be made with Western national security interests at the core. And policymakers

00:47:26: need to start realizing this and they need to stop offsetting their decisions onto bankers

00:47:33: and actually fulfill their roles as policymakers and international experts.

00:47:39: Right. I mean, this really echoes that discussion we heard in Germany at the beginning of the

00:47:44: full scale war as well when it was talked of Germany will have to get off Russian gas.

00:47:49: No, said some big businesses. This will lead to mass and the orbits lozikite or mass unemployment,

00:47:54: a terror word in the German lexicon that brings back images of the 1920s, which are then seen

00:48:00: to have led to Hitler's rise. This was deliberate scaremongering, which did not reflect an accurate

00:48:04: calculation of the risk or an ability to weigh up the different risks involved, as Julia

00:48:09: just said. So we shouldn't give into that. Again, Helena, would you like to add anything

00:48:13: on that?

00:48:14: In a time when crazy things are happening and it's impossible to stay in the same models

00:48:21: of around you time changes and we have to change with them. We can't. I mean, we have

00:48:28: to answer the challenges that occur. And that's why it's important to come up with new solutions

00:48:34: with creative ways to approach the things and stuff like that. And once again, this is

00:48:39: just another argument to be added to the basket with arguments about why Russians assets should

00:48:47: be seized. Yeah, like this was not done before, but okay, we didn't have basically invasions

00:48:55: in atrocities like that over the previous, I don't know, 80 years. And if we don't want

00:49:05: things like that happen in the future, there should be new solutions. There should be new

00:49:11: answers. And they should be like really, I mean, tough and serious.

00:49:17: I think adapting to the times is essential and not just relying on the old tools that

00:49:21: were for a very different situation. All of this brings three things to mind. I think

00:49:25: we should use to concentrate our minds and concentrate the conversation. We've shown

00:49:30: this inability to calculate and weigh different risks against each other. That needs to change.

00:49:35: So we have to be able to understand the consequences again, as Aaron said before, of inaction or

00:49:39: the consequences of different forms of action, rather than just fixating on one kind of risk.

00:49:45: We haven't realized it's our fight. And thus it's our fight to win, because if you're in

00:49:50: that fight, you need to win it. And the third part of that is because I think we haven't

00:49:54: realized our power. We're actually afraid of our power. And this is something that Christianity

00:49:58: Karen said to us in Munich as well. So we need to embrace our strength. If we realize we're

00:50:03: in a fight, we embrace our strength and we start properly calculating risks, then we

00:50:07: have the basis to proceed in a strategic fashion that can actually ensure our security, as

00:50:12: Julia said. And that starts in Ukraine, but it doesn't end there for Europeans, nor for

00:50:17: the rest of the democratic world. We have to really get ahead of that. And as Robin

00:50:20: Wagner said, act as a team to do that and bring our different qualities to bear and

00:50:25: leverage them by working properly together.

00:50:28: You've been talking about power just a second ago, Ben, that we are afraid of our own power

00:50:33: by seizing the entirety of this 300 billion in assets. As the G7, when we have 89% of

00:50:42: the world's currency reserves, that is certainly a demonstration of economic power, not simply

00:50:47: military power. And I think too often we think of Ukraine and Russia's war against it, only

00:50:54: in military terms. We have to remember that this involves everything that we're able to

00:51:00: do. That's why we're having this particular discussion on the seizure of assets. So when

00:51:04: it comes to precedent and the power to set a precedent by using this particular power,

00:51:09: I'd like to come back to one line of one book that's a bit old at the moment, but it's

00:51:14: Mark Leonard's Why Europe Will Run the 21st Century. One line, I think, of that book that

00:51:21: is still interesting today is when he says Europe's weapon is the law. Well, if that

00:51:26: is in fact true, then this is a step that we need to actually take, to actually prove

00:51:31: it, to use the rule of law, to uphold the rule of law, and to say that there are consequences

00:51:37: for not upholding the rule of law. And one of those consequences is that we will seize

00:51:42: your assets.

00:51:43: In a thesis from that book that was otherwise aged like milk, Aaron, I think you managed

00:51:48: to find a little bit of cream to hold on to. And of course, legal weapon with its economic

00:51:54: weapon, and finally, to find some military weapons to go with it, to have the full array

00:51:58: of power at our disposal in order to stand up for that free world, in order to stand

00:52:02: up and make sure that we understand that our fight for victory in the systemic competition

00:52:06: runs through victory in Ukraine, which is our common victory.

00:52:10: Thank you so much to Helena Janchenko, Robin Wagner, and Julia Suskina for being with

00:52:14: us today. Joining us now from Ottawa is Canadian Senator Ratna Omidvar, who has been working

00:52:20: with experts like Julia on the Canadian legislation for Seizing Russian State Assets. Welcome

00:52:25: to the show, and thank you for joining us.

00:52:28: So Senator, Canada and the US are way ahead of just about every other country when it

00:52:32: comes to actual legislation and a framework, a legal framework to seize Russian assets.

00:52:41: But if we look at Canada's recent budget, it really seems to signal a bit of a walk

00:52:47: back from some of the tough talk that we've seen on this whole theme of seizing Russian

00:52:52: assets really since the invasion. Now it seems that the government here wants to tie

00:52:59: itself to whatever G7 consensus is. So where is Canadian leadership on this question?

00:53:05: I believe Canada is a world leader on this fight. We were the first to propose seizure

00:53:12: of assets of oligarchs. We were the first to actually try and walk through the process.

00:53:18: We're in court. We have to get it completely right so that any seizures that are affected

00:53:24: under the law can be more nimble and more flexible at this point than they are.

00:53:30: The budget also clearly states that Canada's current position is that Russian state assets

00:53:37: can be used and it is within the framework of the law that Canada accepts the findings

00:53:43: of international lawyers that we can use those Russian state assets. Now, Aaron, I must say

00:53:48: that the budget, at least in Canada, is always a bit of an aspirational statement. It lays

00:53:54: out a few directions, but the guts of the budget we will see in June when the Budget

00:54:01: Implementation Act is tabled. And a few things have happened since Canada's budget came out.

00:54:06: I agree with you that Canada did say we want to work in collaboration with our allies.

00:54:11: The repo act was passed in the US and I believe this may add some wind to our sales that in

00:54:18: fact we too need to anchor our capacity already to use countermeasures under international

00:54:24: law, but to anchor them in domestic legislation so that it is more fail-safe. So I'm still

00:54:31: very much hoping that in this time between now and June that our government looks at

00:54:37: what the United States is doing and seeks now to emulate the United States. But I believe

00:54:42: it is the pathway that is being created both by the US and repo and eventually I hope by

00:54:49: Canada that will give comfort to others who are more risk averse, who are regionally more

00:54:55: vulnerable. Let me put it this way. So I think seeking solidarity is in sanctions regimes.

00:55:06: Solidarity always works when sanctions may be nation-based, but when six or seven nations

00:55:12: do that then it has an impact. So I'm still, you can hear in my voice Aaron, I'm still

00:55:18: hopeful that Canada will follow the example of the United States now. We had always hoped

00:55:24: that the United States would follow Canada. Senator, let me follow up on that there because

00:55:28: I think this is extremely important. Obviously unity is a concept that is talked about a

00:55:33: lot among the Allies and is prized as a good in itself. But if it's unity around the lowest

00:55:38: common denominator, it's not good enough for our current circumstance. We need unity around

00:55:43: the highest common factor. So what does Canada actually expect from those Allies that you

00:55:47: mentioned who are more risk averse but who have more assets that could be seized? I believe

00:55:53: Canada as a middle power wants to be seen leading in this file and we have led in this file

00:56:00: for the last number of years. Others have followed us. In the case of repurposing Russian

00:56:06: state assets, I agree completely that seizing the state assets and letting Ukraine fight

00:56:14: its just war with Russian money as opposed to Canadian taxpayer money or US taxpayer money

00:56:20: is far more just. It also enables us to get to scale in terms of money quickly. There

00:56:26: is after all $350 billion and most importantly, it doesn't encumber the Ukraine to the extent

00:56:34: into the future in a post war economy in a way that maybe collateralizing or securitizing

00:56:43: those assets would. I know that there seem to be two ideas moving at some pace. I'm certainly

00:56:51: hoping that Canada will have a Churchill moment on this and embrace for me the more, I mean

00:56:59: I'm an individual senator. What I say or do is really not government policy. It's what

00:57:05: I'm proposing and I'm certainly hoping that the government between now and the tabling

00:57:09: of the Budget Implementation Act stiffens its spine a little and that's what is right,

00:57:15: easy, quick, fast and does not encumber Ukraine into the future.

00:57:19: So let's talk a little bit about something that you brought up a second ago, which is

00:57:22: the US repo act, which of course the US is the first country that has passed domestic

00:57:28: legislation allowing for the seizure of Russian state assets. I of course as a Canadian myself

00:57:32: was kind of hoping we'd be first, but perhaps going second isn't such a terrible thing either.

00:57:39: If we do see as you're saying something in the Budget Implementation Act in June or

00:57:48: anything up until then, what do you think Canadian legislation might do if Canada does

00:57:55: have its Churchill moment and chooses to lead to that narrative? I mean the repo act certainly

00:58:00: seems to change that narrative. Does that give us sort of more impetus to kind of find

00:58:07: our Churchill moment and what do you think that would do to the overall narrative, especially

00:58:12: because perhaps Europeans would sit there and say, well of course the US is going to

00:58:15: do this, but Canada, you know, it's a country that is well renowned for its respect for

00:58:21: international law. It's maybe a little bit harder to ignore. What do you think Canada's

00:58:25: role could be there? I believe Canada's role would be in carving

00:58:29: a pathway in terms of domestic legislation and helping other countries craft their own

00:58:36: pathway. I had begun to hear that Switzerland was pretty keen on this idea as is the UK.

00:58:44: Everybody's positions now seem to be getting more nuanced a little and shifting a little,

00:58:49: so I think between now and the next G7 moment is a time for those of us who want to work

00:58:56: on the asset seizure side to really amplify and ramp up our work.

00:59:00: Right, indeed, and that's also something that allies are asking from Canada too, other

00:59:04: allies, because as much as the pocket brigade that Canada has deployed to Latvia is appreciated

00:59:10: in the region, it's not a full brigade and also Canada's not paying its way in NATO.

00:59:15: 1.29% of GDP on defence spending is not where Canada needs to be on that. So to truly be

00:59:21: on the team for the victory of democracies against autocracies, I think there's a lot

00:59:25: of eyes on Ottawa to say, if you're not leading militarily or even not paying your way militarily,

00:59:31: where is your leadership and your contribution coming from?

00:59:33: I think Canadians would dispute the implicit conclusion that you are making Benjamin in

00:59:40: that statement. Canadians see themselves very much on the side of the Ukrainians for a country

00:59:45: and economy of our size. We have, and I'm not going to use the word generous because

00:59:51: generous is patronising. We have provided help to the Ukraine in different ways. I won't

01:00:00: talk about the light-armoured vehicles, for instance, and I know the number is small,

01:00:06: but I heard from a Ukrainian parliamentarian last week in Ottawa that getting the donation

01:00:13: of the light-armoured vehicles opened up the pathway for the US to provide strikers because

01:00:20: the Ukraine could demonstrate that he was able to deal with service and use those LAVs,

01:00:28: which are the same technology as the US strikers, I believe they are called.

01:00:33: So we're never going to be the largest donors to Ukraine because we simply, we don't have

01:00:38: the size of the economy that, let's say, the US has or Germany has, but we can lead with

01:00:44: good ideas. Now, in this case, I'm certainly going to do everything I can to give the Canadian

01:00:52: government as best as I can, along with the help of podcasts like this, that the easiest,

01:00:59: quickest, fastest, most just route to help Ukraine fight this war is to seize those assets.

01:01:07: Now, maybe we need to de-risk this idea. I've become very conscious of the word risk and

01:01:14: risk aversion as I have worked on this file. So snatching $350 billion at one fell swoop

01:01:24: is spooky, perhaps. So perhaps what we can do instead is develop a schedule of asset

01:01:31: confiscation, which is open, transparent, it accelerates with time at set intervals,

01:01:38: unless certain Russia is able to meet certain conditions. So that provides a certain amount

01:01:46: of predictability that we will take the first 10% then and we will take the next 20% then.

01:01:53: And so that may help to de-risk this whole idea. And there are a lot of vultures, if I

01:02:05: may say, around this proposal, around what happens to G7 assets that are stranded in

01:02:11: Russia. And already we've heard that Russia is taking the assets of one country or the

01:02:19: other way. But if we are only going to view this as a transactional measure, that we'll

01:02:26: take this and they'll take that, we'll never get back to the heart of what the real question

01:02:31: is, which is how do we preserve the global order by securing safety and security for

01:02:39: Ukraine? Because if we let Ukraine fall, then I believe there will be other countries next.

01:02:46: And that's what we have to stop.

01:02:48: And I think seizing the assets has certainly plays a huge role in that, partly to give Ukraine

01:02:53: the amount of cash that it needs right now to be able to actually win this war, not simply

01:03:00: to put it off to some reconstruction that happens we don't know when. And that presupposes

01:03:06: the outcome of the war, which we don't know yet. So I really do see the potential for

01:03:12: Canadian and other leadership on this particular question. But we have to want to win. And

01:03:21: this is certainly would be a big step in doing that. It seems though that we have to find

01:03:26: the will to do that the legislative framework is there. You know, this is legal under international

01:03:32: law. We just have to find the political will to do it as you said the Churchill moment.

01:03:37: It all comes down to those two words, political will and political will, you know, I've been

01:03:42: in the political arena for for some time and I can I can say with some with some experience

01:03:51: that political will is always strengthened when you have more than one in the room.

01:03:57: And I believe that is what Canada may well be looking for now with the United States

01:04:00: in the room. Let's also remember the US legislation as Canadians as Canada's proposed legislation

01:04:06: that I have tabled doesn't doesn't force the government to use the instrument. It enables

01:04:12: the government to do something if they so choose to do.

01:04:16: Absolutely. So that's also a task for allies to make sure that Canada doesn't feel a lot

01:04:21: alone in doing this, make sure that there is there is the political will. And that comes

01:04:26: from two sources that comes from encouragement, the motivation, but also from pressure. There's

01:04:30: sticks and there's carrots here. And I think they're being clear about who's contributing

01:04:35: to this fight and who who isn't is part of that part of that discussion. Senator, we're

01:04:39: delighted to have had you with us today on Berlin's side out to discuss your proposed

01:04:44: legislation and the need for Canada to step up and to not only having made this legal

01:04:50: pave the pave the way, but to actually follow through and blaze that trail for others to

01:04:55: actually follow in showing that will that it will be needed to win.

01:05:00: Thank you so much to our panelists for joining us today on part two of our Pillars of Victory

01:05:03: special focusing on the financial measures we need to win. Thank you also to our technical

01:05:09: producer, Hendrik Banner and our project assistant, Yelid Stukla. Stay tuned for the rest of

01:05:13: our season as we get through the real strategic turning point that Germany needs. And we give

01:05:18: you a sneak peek at what's next for us at Berlin's side out. Until then, from Berlin,

01:05:23: auf wiedersehen, entschüss.

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