The German government has been searching for financial resources for weeks after the Supreme Court blocked the $60 billion Berlin wanted to budget for next year. But unexpected help may come from an investigation into the accounts of a Russian bank launched last summer.
According to the newspaper politicalThe federal prosecutor in Frankfurt yesterday announced a motion to seize approximately 720 million euros deposited by a Russian financial institution into a local bank account.
In the prosecutor’s statement, we read that the money in question was frozen in June 2022 as a result of the sanctions imposed by the EU on Russia: Shortly afterwards, the Russian bank (apparently a branch of the Moscow stock exchange) launched an investigation into the withdrawal of the frozen funds. According to sources aware of the investigation, the prosecutor’s request dates back to last July, but it became known only yesterday due to difficulties in finding a judicial defense for the institute under investigation.
resource hunting
Given the Berlin government’s recent fiscal stalemate, with coalition partners laboriously agreeing on a 2024 budget, the money could come in handy to provide liquidity to the federal budget at a time when spending is rising but resources are scarce.
Chancellor Olaf Scholz’s cabinet yesterday approved a new plan to cut public spending to close the 60 billion deficit in the national budget opened by the Constitutional Court’s decision last month. Epidemic to combat Covid-19. The Karlsruhe judges’ decision threw the majority into crisis, whose shareholders have very different attitudes towards public finances: the Greens and Social Democrats are more inclined to expansionary measures, while the Liberals are fiscal hawks.
This could mean an escalation of the indirect conflict between Russia and the West, given that Germany has so far only frozen the assets of individuals and companies affected by Western sanctions, but has not gone so far as to actually reuse the confiscated funds. If this proposal is successful, it will certainly have significant political repercussions in the country and Europe.
However, this will not be a quick process or one whose outcome will be predictable. The decision is currently in the hands of the Hessen high court in Frankfurt and the trial could take a long time. But this would not be unprecedented, given that the United States has already announced a similar transfer of seized Russian assets to Ukraine. The possibility of using frozen assets from Russian assets to help rebuild Kiev is also being discussed in Brussels.
Moscow’s response
However, while EU countries are discussing, Russia is definitely not watching. So, President Vladimir Putin yesterday signed a decree authorizing the government to seize and resell assets belonging to energy companies in countries deemed “hostile” to Moscow.
Still political He underlines that the Yuzhno-Russkoye gas and oil field in the deep north of the Federation is targeted by the Kremlin. Currently 60% of the drilling field is owned by two European companies, Austrian Omw and German Wintershall. However, they may soon be dismissed with compensation to be determined by the Russian government.
This is the largest asset seizure in recent Russian history, after the development in recent months of the legal framework for expropriating foreign-owned assets with the aim of recovering some of the assets lost under Western sanctions and shifting the economy towards war.
Moreover, the Kremlin has for some time begun to seize the assets of Western companies (e.g. Danone and Carlsberg), resell them and give the proceeds to various oligarchs close to Putin.
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Source: Today IT
Karen Clayton is a seasoned journalist and author at The Nation Update, with a focus on world news and current events. She has a background in international relations, which gives her a deep understanding of the political, economic and social factors that shape the global landscape. She writes about a wide range of topics, including conflicts, political upheavals, and economic trends, as well as humanitarian crisis and human rights issues.
