The West disagrees over Russia's handling of more than $300 billion in freezes

The United States wants to seize assets frozen from Russia, but Germany and many other countries fear the move will harm themselves and the West.


Germany is becoming one of the fiercest opponents of a U.S.-led effort to seize more than $330 billion in Russian central bank assets frozen in the West after it launched its war in Ukraine.

Berlin fears such an attempt to confiscate frozen assets could set a precedent, prompting other countries to follow suit and turn against Germany for what happened during World War II. Germany only favors using profits from frozen assets to transfer to Ukraine.

Of Russia's frozen assets, the European Union holds about $229 billion, most of it in Belgian financial services company Euroclear.

Claims for reparations for World War II losses dogged Germany for decades, sometimes even straining relations with its neighbors. After World War II, Berlin had to pay war reparations to the Allies and the Soviet Union. Since 1952, Germany has paid out more than $90 billion to Holocaust survivors and their families, according to Jewish organizations.

Recent claims continue to emerge. Poland, which was invaded and occupied by Nazi Germany during World War II, offered Berlin $1.3 trillion in compensation as of 2022, while Greece from 2019 demanded more than $300 billion

Germany said the issue of reparations had been settled with post-war payments and the 1990 border treaty. The Soviet Union and the United States signed the treaty, but Poland, Greece and Italy did not join.

In 2004, when Poland joined the EU, Berlin agreed not to support claims against Warsaw from millions of Germans. In return, Poland waived its claim for compensation. However, the issue was again raised by the Polish side last year.

"When it comes to executioners, victims, punishment and suffering, we don't just evoke memories or facts. We demand compensation," then-Polish Prime Minister Mateusz Morawiecki said on the 84th anniversary of the German invasion in September 2023.

Courts in Italy have ruled in recent years to seek compensation for the families of the occupyed victims. Some German courts have even attempted to confiscate German assets, including Italian real estate belonging to German schools, cultural, historical and archaeological institutions. Berlin has taken Rome to the International Court of Justice (ICJ) and is pending.

Berlin argues that international law prohibits individuals from making claims against states in international courts, arguing that state assets cannot be confiscated. Berlin added that violating this principle in the case of Russia would undermine Germany's long-standing legal position

Poland received very little reparations after World War II. Germany paid $270 million for individual compensation claims in Poland, after ravaging the country and leaving 5-6 million dead, about 3 million of them Jewish.

The Polish government renounced its claim to East Germany in 1953. However, the issue was raised again after the fall of the Berlin Wall in 1989. German Chancellor Helmut Kohl sought to link the waiver of the claim to recognition of Poland's postwar borders, including lands that once belonged to Germany. Kohl eventually abandoned the effort because of international and domestic pressure.

Andreas Rodder, a professor of contemporary history at Johannes Gutenberg University in Mainz, Germany, said Italian and Polish claims were well-founded. But German governments have repeatedly made the mistake of refusing to find a way to compromise, raising tensions
"Germany assumed that the problem was solved and deliberately avoided it for decades. So it's no surprise that Greece and Poland say the problem hasn't been definitively resolved," Rodder said.

Berlin argues that frozen Russian assets should be left in place to be used as leverage in peace talks and prompt Moscow to cede some of the territory it controls to Kiev.

Slawomir Debski, head of the Polish Institute of International Affairs (PISM) in Warsaw, said another motivation for Berlin's refusal to confiscate Moscow's assets may have been to protect its companies in Russia from retaliation. The group Leave Russia, which lobbies Western companies to leave the Russian market, said 272 German companies still operate there.

Bart Szewczyk, who works at the U.S. law firm Covington and worked as a consultant to the European Commission, said Berlin's concerns about the risk of setting a precedent for compensation were unjustified. "The logic of the measures being proposed clearly applies only to current behaviors, not to what happened 80 years ago," he said.

However, German Chancellor Olaf Scholz, an expert on law, is not willing to take risks. Within the G7, disagreements have also emerged. The U.S. proposed the group would pay Ukraine 10 years in advance for profits from Russia's frozen accounts. The money serves as collateral for bonds issued to help Ukraine sell and raise money. The G7 countries will be the guarantors for bondholders.

President Joe Biden this week signed legislation allowing Washington to seize Russian assets under the jurisdiction of the United States, which holds $5 billion to $6 billion in Russian assets. "We're looking at a range of different possibilities from foreclosure to using them as collateral," Treasury Secretary Janet Yellen said last week.

The United States argues that under international law, states can take countermeasures that are not required by law against a country that violates its international obligations. While lawyers and policymakers say Russia's war in Ukraine is a "violation of international obligations," they debate whether any country other than Ukraine should be entitled to take unlawful measures against it.

U.S. officials initially feared confiscating Russian assets could lead Washington to kick its own feet and allies like Israel. The U.S. later argued that only countries directly affected, such as the main backing group and defense aid to Ukraine, or countries that could be threatened by security, had the right to seize Russian assets.

However, Japan, a G7 member and a country that has faced many demands for compensation from its neighbors, shares Germany's stance and opposes the idea. Japan's Foreign Ministry said it would continue to discuss the issue with its G7 counterparts. France, Italy and the European Central Bank are also hesitant, fearing that the seizure of Russian assets could hurt international confidence in the euro and eurozone assets.

Europe has its own plan to use the interest from the frozen money to buy weapons and finance Ukraine's reconstruction. That means the plan could get ahead soon, though EU officials say Europe could join the U.S. plan by 2025.


The divergent stance of Western countries risks threatening efforts to use frozen Russian assets to support Ukraine. The United States and Britain say the success of the effort is crucial to Kiev's chances of victory, but the idea will be difficult to advance without widespread support.

Russian Foreign Ministry spokeswoman Maria Zakharova said Moscow rejected the possibility of exchanging territories it controlled for frozen assets. "I don't know who claimed what, but the property cannot be exchanged for territory. We don't sell our homeland. And Russian property is also sacrosanct, otherwise Western theft would be met with a harsh reaction. Many Westerners have realized this, but unfortunately not all of them," she wrote on Telegram.

Western companies whose assets have been nationalized include Finland's Fortum, Germany's Uniper and Germany's Carlsberg. "The frozen assets we have are no less than the West," Russian Finance Minister Anton Siluanov said.

"This could be a sign that Russia is determined to play to the end, as the Ukraine conflict has caused it to sever most political and economic ties with the West," said Elina Ribakova, director of the International Affairs Program and vice president for foreign policy at the Kiev School of Economics. speak.