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Will Seizure of Russian Assets Hasten Dollar Decline?
Will Seizure of Russian Assets Hasten Dollar Decline?
While much of the world focused last week on whether or not the Federal Reserve was going to raise interest rates, or whether the Greek debt crisis would bring Europe to a crisis, the Permanent Court of Arbitration in The Hague awarded a $50 billion judgment to shareholders of the former oil company Yukos in their case against the Russian government. The governments of Belgium and France moved immediately to freeze Russian state assets in their countries, naturally provoking the anger of the Russian government.
The timing of these actions is quite curious, coming as the Greek crisis in the EU seems to be reaching a tipping point and Greece, having perhaps abandoned the possibility of rapprochement with Europe, has been making overtures to Russia to help bail it out of its mess. And with the IMF’s recent statement pledging its full and unconditional support to Ukraine, it has become even more clear that the IMF and other major multilateral institutions are not blindly technical organizations, but rather are totally subservient lackeys to the foreign policy agenda emanating from Washington. Toe the DC party line and the internationalists will bail you out regardless of how badly you mess up, but if you even think about talking to Russia you will face serious consequences.
The United States government is desperately trying to cling to the notion of a unipolar world, with the United States at its center dictating foreign affairs and monetary policy while its client states dutifully carry out instructions. But the world order is not unipolar, and the existence of Russia and China is a stark reminder of that. For decades, the United States has benefited as the creator and defender of the world’s reserve currency, the dollar.
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Furious Russia Will “Respond In Kind” To Europe’s “Political” Asset Seizures
Furious Russia Will “Respond In Kind” To Europe’s “Political” Asset Seizures
On Thursday, nearly 50 Belgian companies were told to disclose their Russian state assets, setting the stage for the seizure of Russian property in connection with the disputed $50 billion Yukos verdict.
In short, Russia was required to submit a plan for a €1.6 billion payment by June 15 pursuant to the 2014 arbitration court decision which found in favor of Yukos shareholders who the ECHR ruled were treated unfairly when Moscow seized the company amid allegations of fraud and other crimes. Russia appealed the ruling and lost.
Because Russia does not look set to comply, Belgium is effectively moving to enforce the ruling itself. Austria and France also moved to freeze Russian assets on Thursday.
It now appears the timing of the asset freezes was designed to stir controversy in St. Petersburg where Russia is hosting an annual business forum (described by some as a “Russian Davos) and where Greece is executing the first stages of the dreaded ‘Russian pivot.’
Now, Russia looks set to retaliate, threatening to freeze Belgian, Austrian, and French assets until such a time as the countries’ “illegal” actions are reversed. RT has more:
Moscow will take reciprocal action in response to the seizure of its foreign assets, Foreign Minister Sergey Lavrov has warned.“Our response would be in kind. This is inevitable. This is the only way of acting in international affairs,” he told RBK-TV in an intervew.
Lavrov was commenting on the seizure in Belgium and France of Russian state-owned assets. The arrest were made on request of beneficiaries of the now-defunct oil giant Yukos, who were awarded damages from Russia by an arbitration court in The Hague. Russia is in the process of challenging the ruling.
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