Joseph E. Stiglitz and Andrew Kosenko write:

As Russia’s war against Ukraine continues to wreak havoc both regionally and globally, the Ukrainian people and their allies demonstrate remarkable determination and courage. But nearly two years after Russia launched its full-scale invasion, it is increasingly clear that the international community can and must do much more to help.

While the G7 countries and other governments around the world have been extraordinarily generous in supporting the Ukrainian war effort, there are signs of growing fatigue in some circles – a development Russia appears to have anticipated. With the United States and the European Union failing to commit more than $100 billion in aid to Ukraine in December, the idea of seizing Russian assets frozen by Western countries has re-emerged as a potential solution.

Although seizing these assets would boost Ukrainian morale and finances, policymakers on both sides of the Atlantic are wary. As The New York Times recently reported, top US officials fear that setting such a precedent would deter other countries from depositing their funds at the New York Federal Reserve or holding them in dollars.

But the concern that other governments might become wary of keeping their funds in the US for fear of future seizures overlooks some key points. Seizing Russia’s frozen assets would not affect other countries’ assets or change the incentives of governments that are not planning a major war. Moreover, by not seizing these funds, Western countries are signaling that governments waging brutal wars of aggression can violate international law and simultaneously benefit from it to escape the consequences of their actions. Instead, G7 leaders should send a clear message: no country can have it both ways. By deterring other bad actors from violating international law, such seizures could act as a peace-building measure. [Continue reading…]