WEBVTT - Why Putin Won’t Get His $300 Billion Back 0:00:00.200 --> 0:00:01.280 Welcome to in the City. 0:00:01.360 --> 0:00:04.280 I'm David Merritt and I'm Francine Lakwa, and this week, Dave, 0:00:04.320 --> 0:00:06.840 we talk about Russia. 0:00:06.880 --> 0:00:11.200 Of course, last week saw the second anniversary of the 0:00:11.240 --> 0:00:15.280 invasion of Ukraine by Russia, and with Western governments all 0:00:15.440 --> 0:00:18.119 trying to figure out how to continue to shore up support, 0:00:18.160 --> 0:00:23.640 there's this debate that's emerging around possibly seizing some of 0:00:23.640 --> 0:00:25.680 the Russian assets that were frozen around the world to 0:00:26.040 --> 0:00:29.120 channel that money into Ukraine, and it's causing something of 0:00:29.160 --> 0:00:32.000 a row between governments and banks around the world. 0:00:32.320 --> 0:00:34.960 As you say, David, it's been twenty four months that 0:00:35.120 --> 0:00:37.640 this war has been ongoing, and it's very clear that 0:00:37.760 --> 0:00:40.839 Ukraine is also becoming more desperate for funding, especially as 0:00:40.880 --> 0:00:43.000 aid from the US is not being unlocked for now. 0:00:43.360 --> 0:00:46.720 Yes, and we all know about the relative failure of 0:00:46.720 --> 0:00:50.320 the Ukrainian counter offensive last year, So governments are really 0:00:50.360 --> 0:00:53.559 agonizing about what can be done to give Ukraine the 0:00:53.600 --> 0:00:58.560 support it needs. And Richie Sunak I saw wrote an 0:00:58.640 --> 0:01:01.520 off ed in the Sundays it's saying that Western nations 0:01:01.560 --> 0:01:06.160 need to be more aggressive in actually seizing those frozen 0:01:06.240 --> 0:01:10.040 Russian assets and then channeling that money back to Ukraine. 0:01:10.200 --> 0:01:11.880 The problem is that if you're a bank, or if 0:01:11.880 --> 0:01:14.840 you're in financial services, you wonder where this ends. So 0:01:14.840 --> 0:01:17.400 a lot of them are pushing back, and they're warning 0:01:17.400 --> 0:01:20.480 the UK government that if there's not the right law, 0:01:20.520 --> 0:01:23.280 it's very difficult to just press the button and sees 0:01:23.560 --> 0:01:25.480 billions of pounds worth of Russian assets. 0:01:25.640 --> 0:01:29.399 That's right. They're worried about getting snarled in legal disputes. 0:01:29.760 --> 0:01:32.640 They're worried about the reputation for London as a center 0:01:32.760 --> 0:01:35.920 if governments can just seize assets like this, And Richie 0:01:35.920 --> 0:01:38.679 Sunak says in his column that there needs to be 0:01:38.720 --> 0:01:42.880 a lawful way of doing this. Is there, in fact 0:01:42.959 --> 0:01:46.279 a lawful way to seize tens or hundreds of billions 0:01:46.319 --> 0:01:50.120 of dollars of another country's money. That's what we need 0:01:50.160 --> 0:01:53.240 to dive into in this episode. 0:01:53.440 --> 0:01:56.080 So with us for this is Stephanie Baker, senior reporter 0:01:56.200 --> 0:01:59.320 on Bloomberg's investigations team. And Stephanie, you've also been calling 0:01:59.360 --> 0:02:02.000 all of your little Black book all the contacts because 0:02:02.000 --> 0:02:02.920 you're writing a book on this. 0:02:03.320 --> 0:02:08.400 Yeah, I've spent the past six months deep into sanctions 0:02:08.400 --> 0:02:12.160 against Russia. My book is coming out later this year. 0:02:12.160 --> 0:02:15.240 It's called punishing Putin inside the economic war against Russia. 0:02:16.280 --> 0:02:20.519 So I've been talking to everyone from oligarchs to US officials, 0:02:20.760 --> 0:02:25.160 people in Brussels, London devising these policies to try to 0:02:25.200 --> 0:02:27.480 slow down Russia's advance in Ukraine. 0:02:27.680 --> 0:02:31.920 So Stephanie, you are the expert in trying to understand oligarchs, 0:02:31.960 --> 0:02:34.200 especially all of this Russian money that for a long 0:02:34.280 --> 0:02:37.280 time was in London that we thought maybe has left, 0:02:37.360 --> 0:02:40.560 But where are we? Did the sanctions work as we 0:02:40.600 --> 0:02:41.240 thought they would. 0:02:41.400 --> 0:02:43.880 There are two buckets of Russian money that have been 0:02:43.919 --> 0:02:47.040 frozen as a result of sanctions. There's the oligarch sanctions, 0:02:47.080 --> 0:02:51.000 which are the mansions and the yachts and the private jets, 0:02:51.639 --> 0:02:56.239 And for any oligarch with assets in London or EU 0:02:56.480 --> 0:02:59.440 or the US with those sort of assets, those are grounded. 0:02:59.480 --> 0:03:02.160 Those are for Then there's a second pot of money, 0:03:02.200 --> 0:03:07.280 which is the Russian Central Bank reserves. And that's a 0:03:07.320 --> 0:03:10.320 pot of about three hundred billion dollars that was frozen 0:03:10.600 --> 0:03:15.520 within days of Russia's invasion in a very unprecedented move. 0:03:16.400 --> 0:03:19.760 And when Rishie Sunak is talking about seizing Russian assets, 0:03:19.840 --> 0:03:21.919 that is the pot of money he's talking about. He's 0:03:21.960 --> 0:03:25.120 not talking about the Oligarch assets. You would need to 0:03:25.200 --> 0:03:29.119 prove that there has been a crime of either sanctions 0:03:29.120 --> 0:03:32.440 of vasion or money laundering, and therefore you could seize 0:03:32.480 --> 0:03:35.720 those assets as the proceeds of a crime, and that 0:03:35.800 --> 0:03:40.000 is happening in the US with some Olivegarch assets. This 0:03:40.160 --> 0:03:44.080 Russian Central bank funds is a much bigger pot of money, 0:03:44.080 --> 0:03:49.040 so much more consequential, and it is not subject to court. 0:03:49.240 --> 0:03:52.680 The people who are pushing this idea are saying it 0:03:52.720 --> 0:03:57.280 would be allowed under the international law called countermeasures, which 0:03:57.320 --> 0:04:01.440 is a state on state action. It would not challenge 0:04:01.760 --> 0:04:06.400 the whole concept of sovereign immunity. Countermeasures is a part 0:04:06.400 --> 0:04:09.600 of international law. It's different from sanctions. It's all about 0:04:09.600 --> 0:04:13.880 compensating victims, and there's precedent for that, but certainly not 0:04:14.000 --> 0:04:16.240 precedent in terms of the scale of the money we're 0:04:16.279 --> 0:04:17.279 talking about right now. 0:04:17.760 --> 0:04:20.880 So, Stephanie, I remember when the central banks there was 0:04:20.920 --> 0:04:24.520 this coordinated announcement. Wasn't there about freezing those assets the 0:04:24.520 --> 0:04:29.240 three hundred billion that you just mentioned right after in 0:04:29.360 --> 0:04:31.480 just in the days after the invasion of Ukraine, And 0:04:31.480 --> 0:04:33.120 I remember talking to a senior official at the Bank 0:04:33.160 --> 0:04:34.920 of England, and they said it was like they were 0:04:35.160 --> 0:04:37.960 actually trying to engineer a crash in the Russian economy, 0:04:37.960 --> 0:04:40.560 And of course the ruble fell sharply at the time, 0:04:40.600 --> 0:04:43.799 but of course has since recovered and the Russian economy 0:04:44.160 --> 0:04:48.200 seems to be doing just fine despite that action. So 0:04:48.240 --> 0:04:50.680 could you explain a little bit about the thinking behind 0:04:50.680 --> 0:04:54.520 that originally freezing those assets and why they don't seem 0:04:54.520 --> 0:04:57.960 to have really changed the game in terms of Russia's 0:04:58.000 --> 0:04:59.920 actions and the fate of Russia's economy. 0:05:00.880 --> 0:05:05.159 Well, the real reason is because Russia is an energy superpower. 0:05:05.279 --> 0:05:09.760 It exports so much oil and gas. Now, Russia's gas 0:05:09.839 --> 0:05:13.520 exports have fallen precipitously as a result of Europe weaning 0:05:13.560 --> 0:05:17.159 itself off of Russian gas, but it is still a 0:05:17.240 --> 0:05:21.400 major It is this world's second largest oil exporter, so 0:05:21.480 --> 0:05:24.599 it was able to earn an enormous amount of money 0:05:24.800 --> 0:05:28.680 in twenty twenty two as a result of high oil 0:05:28.760 --> 0:05:33.719 prices in parts sparked by his own invasion. So that's 0:05:33.760 --> 0:05:36.320 why it didn't have as much of an effect as 0:05:36.360 --> 0:05:40.280 some thought it would. But I would stress that I 0:05:40.279 --> 0:05:42.160 think it is a huge deal that they did this, 0:05:42.480 --> 0:05:44.360 and it is a huge pot of money, and it 0:05:44.440 --> 0:05:46.760 was not something that Putin was counting on. It was 0:05:46.800 --> 0:05:49.400 a surprise, and if you look at what happened with 0:05:49.400 --> 0:05:53.080 the Russian Central Bank funds, he was preparing for this 0:05:53.200 --> 0:05:56.839 day for many years. He had shifted the Russian Central 0:05:56.839 --> 0:05:59.960 bank assets out of dollars into euros, thinking that you're 0:06:00.040 --> 0:06:02.440 rope would be too divided and wouldn't be able to move. 0:06:03.440 --> 0:06:06.200 And I think he was taken by surprise on this. 0:06:06.360 --> 0:06:10.840 And I think although the Russian economy has rebounded, the 0:06:10.880 --> 0:06:14.679 Western coalition has moved to try to cap his oil 0:06:15.200 --> 0:06:19.599 revenues with mixed results. But I think that this pot 0:06:19.640 --> 0:06:22.719 of money is incredibly important and they want it back. 0:06:23.480 --> 0:06:26.479 And we've just seen, obviously after the death of Alexei Navalni, 0:06:26.880 --> 0:06:30.400 another wave of sanctions, both from a Europe and for 0:06:30.520 --> 0:06:33.840 the United States, a whole new raft of measures. Are 0:06:33.839 --> 0:06:35.719 any of these going to have any impact now? Or 0:06:35.800 --> 0:06:37.200 is it just more of the same. 0:06:38.920 --> 0:06:42.880 It was a very long list some of the entities 0:06:42.880 --> 0:06:45.280 that were targeted. I read and I thought, why did 0:06:45.320 --> 0:06:47.560 it take you two years to do this? You know, 0:06:47.640 --> 0:06:52.040 defense manufacturers, you know certain individuals they should have sanctioned. 0:06:52.320 --> 0:06:54.919 I thought there was nothing left to sanction exactly. 0:06:54.960 --> 0:06:57.520 I was surprised there was, you know, entities I'd never 0:06:57.560 --> 0:07:00.680 really heard of. But they should have sanctioned the entire 0:07:00.760 --> 0:07:04.159 Russian military industrial complex, and they didn't. And I've asked 0:07:04.880 --> 0:07:07.359 questions to officials on this, why didn't you? And I 0:07:07.360 --> 0:07:09.200 think the answer I get is that some of these 0:07:09.279 --> 0:07:12.480 Russian factories are producing other things that are important to 0:07:12.600 --> 0:07:14.920 the world economy. But I think they realize that they 0:07:14.960 --> 0:07:18.400 really need to be much more aggressive and really shut 0:07:18.440 --> 0:07:22.520 down Russia's ability to produce weaponry that is ending up 0:07:22.560 --> 0:07:23.880 on the battlefield in Ukraine. 0:07:24.520 --> 0:07:27.640 So, Stephanie, why is it so controversial now what Rishisunak 0:07:27.840 --> 0:07:31.280 is actually proposing. Is it the seizing and giving to Ukraine? 0:07:31.520 --> 0:07:33.360 And is that a legal problem or are there two 0:07:33.400 --> 0:07:35.560 school of thoughts on how dangerous this could be. 0:07:36.480 --> 0:07:40.840 So there's a few misconceptions about this. Under the international 0:07:40.920 --> 0:07:43.640 Law of countermeasures, which is what everyone says, there is 0:07:43.640 --> 0:07:46.200 a legal precedent for doing this. It is not for 0:07:46.320 --> 0:07:50.080 providing military aid. It is only for reconstruction. So you 0:07:50.120 --> 0:07:54.880 could use the money to help war veterans rebuild hospitals, 0:07:55.280 --> 0:07:58.160 bridges and all those things are important in terms of 0:07:58.240 --> 0:08:02.640 Ukraine's ability to withstand Russi assault. But I think that 0:08:02.760 --> 0:08:05.200 there are two schools of thought on this. One is 0:08:05.240 --> 0:08:08.160 that we passed the rubicon when we froze the reserves 0:08:08.160 --> 0:08:11.040 in the first place, and that if there are concerns 0:08:11.080 --> 0:08:14.040 about the stability of the dollar or the euro or 0:08:14.040 --> 0:08:19.360 the yen, then when the Western coalition froze that pot 0:08:19.360 --> 0:08:22.200 of money, that's when the real concern would be. And 0:08:22.240 --> 0:08:26.200 you didn't see anyone moving away from those currencies. There's 0:08:26.240 --> 0:08:28.800 another school of thought that says the freezing is okay, 0:08:28.880 --> 0:08:32.400 it's the real dangers when you actually seize those assets. Now, 0:08:32.480 --> 0:08:35.960 what Rishie Sunek was proposing was using the interest on 0:08:36.040 --> 0:08:39.480 those assets. It's very similar to what the EU has 0:08:39.520 --> 0:08:42.559 been trying to do with their windfall tax. They looked 0:08:42.559 --> 0:08:44.840 at using the interest, they decided that was not legal, 0:08:45.240 --> 0:08:47.040 that the only way to do it was to tax 0:08:47.480 --> 0:08:51.000 that interest, so they weren't actually seizing the money. There 0:08:51.080 --> 0:08:53.040 is a school of thought of like you tax it, 0:08:53.640 --> 0:08:57.880 you sees the interest, it's all violating the principle, and 0:08:58.120 --> 0:08:59.960 so want not just seize the whole pot. 0:09:00.000 --> 0:09:04.440 But the article that Richie's seen that wrote I thought 0:09:04.440 --> 0:09:06.079 there is this contradiction in the middle of it, isn't 0:09:06.120 --> 0:09:08.520 it because he talks about the need for Russia to 0:09:08.559 --> 0:09:11.720 lose this in order this war, in order to preserve 0:09:11.800 --> 0:09:14.640 a rules based what they call the rules based international order. 0:09:14.800 --> 0:09:17.200 But that's exactly the problem with this maneuver, isn't it 0:09:17.280 --> 0:09:20.320 on these assets that there isn't a precedent? It isn't 0:09:20.360 --> 0:09:22.360 according to the rules, and many people deem it to 0:09:22.400 --> 0:09:24.920 be illegal. So how do you think the West are 0:09:24.960 --> 0:09:28.280 going to be able to reconcile those that contradiction. 0:09:29.400 --> 0:09:33.440 I've interviewed three very prominent people involved in pushing for 0:09:33.480 --> 0:09:37.440 this proposal, Larry Summer's former Treasury secretary, Phil Zelikoe and 0:09:37.440 --> 0:09:42.200 Bob Zolik to veteran Republican officials, and they I think 0:09:42.240 --> 0:09:44.720 put it the most succinctly when they wrote a Foreign 0:09:44.720 --> 0:09:48.840 Affairs story about this, and their phrase was bank robbers 0:09:48.840 --> 0:09:51.800 should not expect banks to honor their safe deposit boxes. 0:09:52.800 --> 0:09:55.680 And I think that gets to the heart of the 0:09:55.720 --> 0:10:00.120 matter that Putin can't expect the rules based order or 0:10:01.280 --> 0:10:03.560 to be followed. If he's not following the rules based 0:10:03.640 --> 0:10:07.440 order himself, he has violated that principle and there is 0:10:07.480 --> 0:10:10.040 a precedent for this. The one that most people point 0:10:10.080 --> 0:10:14.680 to is Iraq. Nineteen ninety one, the UN Security Council 0:10:14.800 --> 0:10:19.880 set up a fund freezing Iraqi assets to compensate victims 0:10:20.040 --> 0:10:23.120 of the Iraq invasion of Kuwait, and they paid out 0:10:23.320 --> 0:10:26.920 more than fifty billion over many years. The problem we 0:10:27.040 --> 0:10:30.240 have now is that there is no consensus on the 0:10:30.360 --> 0:10:34.640 UN Security Council because of Russia and China, and folks 0:10:34.679 --> 0:10:37.120 like Bob Zohlik will say, well, that you can't just 0:10:37.160 --> 0:10:39.600 say you can't use the international legal system because Russia 0:10:39.600 --> 0:10:43.040 and China won't agree. That there has to be another 0:10:43.080 --> 0:10:46.880 mechanism for doing that, and that there is a possibility 0:10:46.920 --> 0:10:49.360 of setting up some sort of international institution, whether it's 0:10:49.360 --> 0:10:52.320 through the World Bank or something else where. There is 0:10:52.480 --> 0:10:55.600 a process and it's not just handing over three hundred 0:10:55.640 --> 0:10:59.000 billion to Ukraine immediately. It is putting it in a fund, 0:10:59.120 --> 0:11:03.559 allowing claims to be made with a transparent process, and 0:11:03.880 --> 0:11:07.280 there is an international kind of overseeing of the whole 0:11:07.480 --> 0:11:08.840 the way the assets are handed out. 0:11:09.160 --> 0:11:12.000 But Stephanie politically, so if this gets seized, and I 0:11:12.000 --> 0:11:14.200 remember at the time when the sanctions were put in place, 0:11:14.720 --> 0:11:16.480 sixty percent of the people that we spoke to were 0:11:16.520 --> 0:11:18.560 one hundred percent in favor, and then the ones that 0:11:18.640 --> 0:11:22.240 maybe worked in more difficult countries said, Liz, you know, 0:11:22.280 --> 0:11:24.560 what does it mean if I'm a big company in 0:11:24.640 --> 0:11:27.240 China and what if something happens politically in China? Does 0:11:27.280 --> 0:11:29.760 it mean that my assets are frozen? So does the 0:11:29.880 --> 0:11:32.960 UK government need to think about the I guess unintended 0:11:32.960 --> 0:11:36.760 consequences of them doing trade with countries that may not 0:11:36.920 --> 0:11:38.480 share our values at all time. 0:11:39.400 --> 0:11:41.559 Yeah, that's a big one. I think that the opposition 0:11:41.720 --> 0:11:46.240 to the seizing of Russian assets often the argument is 0:11:46.240 --> 0:11:48.280 that what happens to the Western companies that are still 0:11:48.320 --> 0:11:53.480 in Russia? And I would argue they should not be 0:11:53.600 --> 0:11:56.040 expecting to get those assets back, and I think it's 0:11:56.080 --> 0:11:58.640 unrealistic for them to think that they will. I think 0:11:58.720 --> 0:12:01.760 that eventually, regardless of what the West does, putin will 0:12:01.800 --> 0:12:04.320 move against those assets. I think it's a naive to 0:12:04.360 --> 0:12:07.240 think that they can get any of that back. And 0:12:07.400 --> 0:12:10.439 you know, yeah, there is a broader I guess argument 0:12:10.480 --> 0:12:14.400 about what this does with China in terms of Western 0:12:14.440 --> 0:12:17.120 companies in China. But the fact of the matter is 0:12:17.280 --> 0:12:21.920 China needs the US dollar, and any country that has 0:12:22.000 --> 0:12:27.160 a trade surplus needs access to fully convertible currency with 0:12:27.240 --> 0:12:30.480 deep capital markets, and that is the United States and 0:12:31.240 --> 0:12:32.199 Europe and the hero. 0:12:32.520 --> 0:12:34.240 I mean, but this is one of the things that 0:12:34.280 --> 0:12:36.520 people are raising an objection to. This, isn't it saying 0:12:36.559 --> 0:12:39.800 that an action like this, a unilateral action, or the 0:12:39.800 --> 0:12:44.240 West acting without the agreements of the entire global community, 0:12:44.320 --> 0:12:47.520 would undermine the dollar and the dollar status, because if 0:12:47.520 --> 0:12:50.560 you can't be sure that your dollars are safe in 0:12:50.720 --> 0:12:52.840 other central banks around the world, then why should you 0:12:53.480 --> 0:12:55.680 keep those assets. You mentioned at the beginning that Putin 0:12:55.720 --> 0:12:58.480 had moved a lot of the assets into euros. But 0:12:58.520 --> 0:13:02.199 do you think this war has got any credibility that 0:13:02.280 --> 0:13:06.240 somehow seizing these assets would shake the foundations of the 0:13:06.880 --> 0:13:07.800 dominance of the dollar. 0:13:08.840 --> 0:13:11.760 Well, that is why there's been such a push to 0:13:12.160 --> 0:13:15.280 have the G seven, the Group of Seven, move in unison, 0:13:15.800 --> 0:13:18.680 so that it's not any one country sticking their neck out. 0:13:19.240 --> 0:13:23.640 That you would have the world's major reserve currencies the dollar, 0:13:23.840 --> 0:13:28.640 the euro, the yen, the pound, and therefore it wouldn't 0:13:28.679 --> 0:13:32.040 be seen as a unilateral action. David Cameron has come 0:13:32.040 --> 0:13:34.080 out very strongly on this. He's been one of the 0:13:34.080 --> 0:13:37.160 most prominent figures to come out early on and argue 0:13:37.160 --> 0:13:40.480 for it forcefully. But the UK doesn't have that much. 0:13:40.720 --> 0:13:42.960 The vast majority of the assets are in Europe. They 0:13:42.960 --> 0:13:47.000 happen to be at Euroclear. So Europe is absolutely essential 0:13:47.040 --> 0:13:47.400 to this. 0:13:47.520 --> 0:13:49.360 And the fact I mean are the European is going 0:13:49.360 --> 0:13:50.520 to get on board with that? Then? Is that where 0:13:50.559 --> 0:13:52.160 the sticking point for this is going to be Because 0:13:52.200 --> 0:13:55.240 the European Union has struggled, of course, with the difference 0:13:55.280 --> 0:13:58.440 of opinions, say between Hungary and France on this issue. 0:13:58.480 --> 0:14:01.480 But we see the G seven members. 0:14:01.280 --> 0:14:05.360 Of Europe agree on this, So you're absolutely right, Europe 0:14:05.440 --> 0:14:09.880 is essential and there is division. France, Germany Italy are 0:14:09.960 --> 0:14:14.440 more suspicious of this. The ECB Christine Legard has been 0:14:14.559 --> 0:14:18.959 also very against it because of concerns about what it 0:14:18.960 --> 0:14:21.920 would do to the euro But there are others within 0:14:21.960 --> 0:14:24.560 the EU that are very supportive of it and think 0:14:24.640 --> 0:14:26.920 that it makes absolutely no sense for the West to 0:14:26.920 --> 0:14:28.720 be sitting on this pot of money. No one thinks 0:14:28.840 --> 0:14:31.520 anyone is going to give this three hundred billion back 0:14:31.520 --> 0:14:35.760 to Putin and frankly it's hard to see in any 0:14:35.920 --> 0:14:39.520 immediate term when Russia will agree to pay war reparations. 0:14:40.240 --> 0:14:43.280 There are a lot of interesting ideas being floated now 0:14:43.360 --> 0:14:47.160 about how you could use these assets as collateral still 0:14:47.160 --> 0:14:49.760 being debated, and maybe that is the ultimate solution, is 0:14:49.800 --> 0:14:52.080 there's some financial engineering that can get around some of 0:14:52.120 --> 0:14:56.880 the legalities that are holding back European countries. I think 0:14:56.880 --> 0:14:59.120 it's going to take some time, but I think as 0:14:59.160 --> 0:15:02.280 the war drags on, I think, given the fact that 0:15:02.520 --> 0:15:07.320 the amount of money Ukraine requires is so enormous, it'll 0:15:07.360 --> 0:15:09.560 be very hard to ignore this pot of Russian money 0:15:09.640 --> 0:15:12.720 and use Western taxpayers funds instead. 0:15:13.160 --> 0:15:15.960 But Stephanie could argue that sanctions so far have not 0:15:16.080 --> 0:15:20.160 really deterred Putin and his resolve of getting Ukraine. So 0:15:20.200 --> 0:15:22.680 would this make a material difference on the Ukrainian side 0:15:22.680 --> 0:15:23.400 of winning the war. 0:15:24.920 --> 0:15:27.920 I've talked to the Ukrainians on this. I mean, the 0:15:28.000 --> 0:15:30.920 latest World Bank estimate is that it will cost four 0:15:31.000 --> 0:15:34.480 hundred and eighty six billion to rebuild Ukraine. And the 0:15:34.520 --> 0:15:38.000 task that they are facing is enormous. It is hundreds 0:15:38.040 --> 0:15:42.680 of bridges, thousands of kilometers of roads, water supply from 0:15:42.720 --> 0:15:46.800 the Nova Kokovka dam collapse last year, There's just an 0:15:46.960 --> 0:15:51.400 enormous amount electricity substations, what have you. And the argument 0:15:51.520 --> 0:15:54.560 is that, Okay, this money can't be used by weapons, 0:15:54.640 --> 0:15:58.160 but just being able to rebuild homes and allow people 0:15:58.200 --> 0:16:02.280 to return is going to increased Ukraine's resilience to resist 0:16:02.520 --> 0:16:05.400 the Russian attacks. So I think it is important, and 0:16:05.680 --> 0:16:08.040 I think it doesn't make sense for Western taxpayers to 0:16:08.080 --> 0:16:11.120 be paying for Ukraine's reconstruction when there's this Russian money 0:16:11.120 --> 0:16:11.600 on the table. 0:16:11.880 --> 0:16:14.600 Stephanie, did you think that actually, by imposing sanctions on 0:16:14.640 --> 0:16:18.920 oligarchs that was supposedly to touch Putin's money, almost his 0:16:19.000 --> 0:16:21.240 direct money, because we can't find a bank account, right, 0:16:21.920 --> 0:16:23.440 did you think at the time that would have made 0:16:23.440 --> 0:16:24.160 more of a difference. 0:16:25.160 --> 0:16:28.080 I was always suspicious of the oligarch sanctions. There are 0:16:28.160 --> 0:16:31.200 kind of two oligarchs, two sets of oligarchs. There that 0:16:31.280 --> 0:16:34.920 the oligarchs that got rich off of Putin directly either 0:16:35.000 --> 0:16:38.800 running state owned companies or getting state contracts, and they 0:16:38.800 --> 0:16:41.240 were very beholden to him. And then there were the 0:16:41.240 --> 0:16:43.720 sort of first wave oligarchs who got rich in the 0:16:43.800 --> 0:16:49.080 nineteen nineties and had a slightly more precarious position visa 0:16:49.160 --> 0:16:54.320 VI Putin. And I've interviewed some of these guys, and 0:16:54.640 --> 0:16:59.120 I think the way Putin exercises power is such that 0:16:59.160 --> 0:17:02.840 it's very hard for them all to band together to 0:17:02.880 --> 0:17:06.200 try to sort of overthrow him or change who sits 0:17:06.200 --> 0:17:08.600 in the Kremlin. So I think they could have been 0:17:08.640 --> 0:17:11.240 a little bit more sophisticated about the way they targeted 0:17:11.240 --> 0:17:13.880 these guys to try to encourage splits at the top. 0:17:15.240 --> 0:17:17.439 But they've been rolling out all these sanctions, it's very 0:17:17.440 --> 0:17:18.640 hard for them to know who's who. 0:17:19.640 --> 0:17:21.480 Stephanie, with all of the way you've been tracking this, 0:17:21.600 --> 0:17:24.440 do you see and the drum beat on this seizure 0:17:24.520 --> 0:17:27.359 question seems to be getting louder with Richie's we've got 0:17:27.359 --> 0:17:30.000 the British Prime Minister coming out strongly for what we've had. 0:17:30.040 --> 0:17:32.520 Biden mentioned it. Do you see this now as sort 0:17:32.560 --> 0:17:35.199 of inevitable? And maybe it's dressed up in some of 0:17:35.200 --> 0:17:37.440 these ways you've talked about, whether it's the interest only 0:17:37.480 --> 0:17:40.440 at first, or financial engineering somehow to make it seem 0:17:40.440 --> 0:17:44.000 palatable or legal and given a legal stamp. But what 0:17:44.000 --> 0:17:45.560 does the next few months look like? Is this something 0:17:45.560 --> 0:17:46.960 that's going to happen imminently? 0:17:47.000 --> 0:17:49.120 In your opinion, I think we're going to be talking 0:17:49.119 --> 0:17:51.080 about it a lot for the next few months, and 0:17:51.160 --> 0:17:53.600 I think it will happen. I can't tell you when 0:17:53.920 --> 0:17:55.760 or how long it will take, and I think a 0:17:55.760 --> 0:17:59.320 lot of that will depend on getting agreement in Europe 0:17:59.440 --> 0:18:02.040 because that's where most of the assets are. But I 0:18:02.080 --> 0:18:04.560 think eventually it will happen in one way or another. 0:18:05.359 --> 0:18:06.680 Stephanie Baker, thank you so much. 0:18:07.080 --> 0:18:07.520 Thank you. 0:18:09.200 --> 0:18:11.240 Thanks for listening to this week's in the City. We'll 0:18:11.240 --> 0:18:13.040 be back next week, but in the meantime, if you 0:18:13.119 --> 0:18:15.359 like our show, please head on over to Apple Podcasts 0:18:15.480 --> 0:18:19.120 or wherever you listen to podcasts and rate, review and subscribe. 0:18:19.280 --> 0:18:22.320 This episode was hosted by me Francine Laqua with David Merritt. 0:18:22.440 --> 0:18:25.760 It was produced by Sammersati, additional editing by Rishi bou 0:18:25.840 --> 0:18:27.840 Jay Cole, and special thanks to Stephanie Baker.