"I believe that Europe would become a no-go investment area for the non-Western world the day Europe seizes the assets of the Russian sovereign state... there is no legal base for seizing the assets of a foreign state," the expert said.
In November, European Commission President Ursula von der Leyen proposed the creation of a special structure to manage the frozen assets of the Russian Central Bank and private assets to support Ukraine. On Thursday, a senior EU official said that the possible use of Russia's frozen assets in the EU was accompanied by complex legal issues, with various EU institutions continuing discussions on the matter.
Gave, who is also a fund manager and investor, criticized another idea of the commission — to use Russia's frozen funds to generate interests that could be confiscated and then allocated to provide infrastructure help to Ukraine — as he called this step "ridiculous" and "illegal."
The expert gave the example of a situation where EU or G7 states could seize the interest generated by German bonds that belong to the Russian Central Bank and are deposited at the Bundesbank, the central bank of Germany. In this case, out of 3.4 billion euros ($3.7 billion) invested, the bloc would get only 340 million euros in interest over a year at a rate of 1%, Gave estimated, adding that this would not be enough for Ukraine's reconstruction.
"It would take years to generate a substantial revenue from European investments of confiscated Russian assets. The G7 has no authority to decide anything. It would be a colossal abuse of power," the expert added.
Gave also stated that the revenue from the interest of Russia's assets would be low and it would divert the focus of the EU from the real issues, including the current excessive debt of member states, which could be difficult to repay once inflation falls.
The geopolitical expert said that the issue of Ukraine's reconstruction should be discussed once the conflict was over. There has to be a negotiated settlement between the two sides, and only then the EU and other Western nations could start rebuilding the country's infrastructure, Gave concluded.
The European Commission estimates the damage caused by the military operation that Russia launched in Ukraine a year ago at 600 billion euros. The West has blocked 300 billion euros worth of Russian Central Bank reserves and 19 billion euros in Russian businessmen' assets, according to von der Leyen. Once sanctions are lifted, these funds "should be used so that Russia pays full compensation for the damages caused to Ukraine," she said last year.
For its part, Moscow has warned that any attempts to confiscate frozen Russian assets fall under the definition of expropriation of property in violation of the European Constitution and international law, pledging to take measures in response if the West goes through with the move.