cross-posted from: https://scribe.disroot.org/post/7110362
Ukraine’s Finance Ministry and the World Bank signed a grant agreement on Thursday worth $690.8 million, funded by Japan and Canada through proceeds generated from frozen Russian assets under an Extraordinary Revenue Acceleration (ERA) Loan.
Signed in autumn 2024, the ERA Loan is the key macrofinancial assistance for Ukraine, helping Kyiv to sustain core state functions during wartime. The tranche represents Canada’s final contribution under the ERA instrument and Japan’s first disbursement.
The funding was secured under the “Supporting Public Expenditures for Sustainable Public Administration in Ukraine” program, known as PEACE in Ukraine, a mechanism set up by the World Bank and Ukraine’s Ministry of Finance.
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According to the finance ministry, the grant will be directed to Ukraine’s general budget fund and used to reimburse critical state expenditure, including pension payments and social assistance programs.
These include housing and utility subsidies, which have grown in importance as millions of Ukrainians face reduced incomes amid the war and repeated attacks on civilian infrastructure.
Of the total $690.8 million package, $544 million stems from the Japanese government, $146 million from Canada, and $800,000 from a multi-donor trust fund established under the PEACE in Ukraine program.
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Following the latest disbursement, total funding mobilized through the PEACE in Ukraine program will reach $51.7 billion, the finance ministry reported.
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The ERA Loan is a crucial component of Ukraine’s 2025 financial strategy, backed by profits generated from frozen Russian assets held in Europe.
The program redirects interest earnings from Russia’s immobilized assets toward Ukraine to compensate for the destruction caused by the war. The ERA Loan provides $50 billion in financial assistance that Ukraine will not have to repay.
This initiative was negotiated between Ukraine, the EU, the US, Canada, Japan, and the UK, with joint agreements signed in late 2024. These countries remain the ERA’s major stakeholders.
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No. I don’t think it’s a good thing to start getting involved in violations of sovereign immunity of overseas assets. There are reasons the EU didn’t go through with this, because it’s damaging to the international law and financial systems. This is Canada and Japan just making up that the law needs to “evolve,” which is basically saying “we known it’s not legal but we don’t care and we’re going to pretend it’s just an update to the law because it suits us.”
I don’t think things like the US stealing Afghanistan’s treasury funds was okay either. I don’t think the UK stealing Venezuelan funds was okay. I don’t think engineering a crash of Iran’s currency to cause chaos and suffering in the country to facilitate regime change was okay. I don’t think unilateral sanctions being used as tools of warfare is a good thing. And, I don’t think Canada should be getting involved in leveraging seized funds belonging to another nation in order to fund war against that nation in violation of sovereign immunity of state funds. All of these are bad precedents. The fact that they’re obviously applied selectively makes it worse, because it’s not even a new norm. It’s just transparent “we support this when it suits us” behaviour.
It makes the world more dangerous. Who is Canada going to turn to when some other country identifies us as being on the wrong side and decides it’s okay to seize Canadian assets? It’s not like anyone is intimidated by us, so if we’ve abandoned international law we shouldn’t be surprised when that is reciprocated in future disagreements. Maybe some country sees fit to seize assets invested by the Canadian pension fund, or the assets of Canadian companies in their jurisdiction. And, we should certainly expect countries to feel more risk in investing or holding assets in Canada than they did before.
It’s opening an international financial Pandora’s box, and we’re just a middle power with no leverage to exert by ourselves over any of th big countries we need to do business with and which all want leverage over us.
To be fair gold/silver prices tell us that this concept is already dead. I mean when even Switzerland can’t be trusted with money anymore…
This is not true. Most legal experts say it is perfectly possible to seize Russian assets.
It was Russia that started this war and it must be clear that it will have to pay for the destruction it has caused.