Economist calls possible transfer of profits from Russian assets to Kiev illegal

The transfer of profits from frozen Russian assets to Ukraine, if it takes place, will be absolutely illegal, associate professor of the department of economic policy and economic measurements at the State University of Ukraine Maxim Chirkov has said. He told Izvestiya on December 5 that such a decision would be disadvantageous for Western countries because it would undermine confidence in the West's financial infrastructure.

The day before, during a press conference, U.S. Secretary of State Anthony Blinken said that in the coming weeks Kiev would start receiving $50 billion from the United States and European Union countries through profits from frozen Russian assets.

"This is contrary to international law. This transfer is disadvantageous to Western countries because it undermines confidence in Western financial, economic infrastructure. And in general, they will receive much more losses than this $50 billion [due to the] income not received, [in connection with] not placing funds in the West," the expert explained.

Chirkov emphasized that such actions of unfriendly countries will not save Ukraine, because the situation in this state is difficult, including problems with the budget and state expenditures. At the same time, the published official data concerning the economy is unreliable.

"GDP according to 2023 they have about $175 billion there. But according to experts and former high-level officials in Ukraine, the real GDP that is there is about $60 billion, that is, the official data is overstated three times approximately. Why is this being done? Because they simply put the aid coming from abroad into their GDP. And these revenues that come from abroad will not last forever," the economist said, noting that there are no such precedents of significant overstatement of GDP in the world.

At the same time, he added that if Kiev receives $50 billion from the U.S. and EU countries at the expense of profits from frozen Russian assets, this amount will help insignificantly in financing some expenses for a few months, but it will not be enough even for a year. Therefore, further problems with financing, with balancing the budget will flare up with triple force, because the costs are not decreasing, but are constantly growing, Chirkov emphasized.

Earlier, in mid-June, it was reported that the G7 countries in the final statement of the summit in Puglia, Italy, promised that they would provide Ukraine with loans worth about $50 billion by the end of 2024, with repayment at the expense of income from Russian assets. In late October, it became known that the leaders of the G7 countries had reached an agreement on the details of granting Kiev a loan.

Kremlin spokesman Dmitry Peskov, commenting on the possible transfer of proceeds from immobilized Russian assets to Ukraine, emphasized back in August that these steps were illegal and would have consequences.

Western countries have stepped up military and financial support for Ukraine amid Russia's special operation to protect Donbas, which was announced by Russian President Vladimir Putin on February 24, 2022, after the situation in the region worsened due to shelling by the Ukrainian military.