Europe and Russia Confront Each Other Over Allocating Russian Assets to Arm Ukraine

Strategic Council Online – Interview: A senior European affairs analyst stated that Russia’s sharp reaction to the decision by Britain and the European Union to use Moscow’s frozen assets in favor of Ukraine has once again revealed new dimensions of the West’s economic war against Russia. The Russian embassy in London described the allocation of over one billion pounds of its blocked funds to purchase weapons for Ukraine as a "criminal act". It warned that such policies would not only weaken London’s financial and political credibility in the world but would also not go unanswered. Simultaneously, the European Commission is also considering transferring 200 billion euros of Russian assets for the reconstruction of Ukraine—a decision that Moscow has described as a clear violation of international law. Experts believe that by arming Ukraine using Russia’s frozen resources, the West has not only escalated the level of economic confrontation but has also challenged the traditional rules of the international financial and trade system. While Russia is seeking ways to circumvent sanctions through some of its partners, Europe and Britain are also determined to maintain pressure. It appears that this economic war is no longer confined to the conflict over Ukraine, and its effects will continue for years to come, redefining international relations and creating new geopolitical blocs.

Dr. Ali Rezvanpour, in an interview with the website of the Strategic Council on Foreign Relations, stated: “The West’s economic and sanctions war against Russia has reached a point where it is not only impacting the economies of the parties involved but is also leaving profound effects on the macro structure of international relations.” The senior European affairs analyst emphasized that “the sanctions imposed after Russia’s invasion of Ukraine in February 2022 are the most severe sanctions ever implemented against a major world power.”

According to this university lecturer, “Although Britain has left the European Union, it has adopted an aggressive policy against Moscow in full coordination with the EU and the United States. The seizure of Russian assets, restrictions on energy exports, and blocking Russia’s access to international financial markets form the backbone of this economic war.” He explained: “As long as the conflict in Ukraine continues, there is not only no prospect of these sanctions being lifted, but it is also entirely likely that they will be intensified.”

Rezvanpour said: “The future of these sanctions is tied to the battle over circumventing restrictions. Russia is seeking to reduce the pressure of sanctions through channels such as China, India, and Turkey, and the success or failure of the West in closing these loopholes will be decisive. In the short term, Russia has managed to overcome the initial shock by relying on foreign exchange reserves and continuing to sell energy to some countries.” However, this expert believes that “in the long term, the pressure of sanctions will push the structure of the Russian economy toward forced Eastern orientation and unprecedented dependence on China—a situation that may turn the country into a regional power with more limited influence on the global stage.”

The senior European affairs analyst pointed out that “Europe and Britain have not been spared from this crisis either. The energy crisis, high inflation, and reduced economic growth are among the direct consequences of these sanctions.” Rezvanpour emphasized that Europe has leaned toward the United States to compensate for these shortages, and this has shifted the balance of power in the West in favor of Washington. In his words, “The economic war against Russia has practically increased Europe’s strategic dependence on the United States in the areas of energy and security—a development that could have significant geopolitical consequences in the future.”

Changing Balance of Power and Redefining International Relations

One of the key points in Rezvanpour’s analysis is the geopolitical consequences of this economic war. The international expert believes that “the West’s sanctions and economic confrontation with Russia are not merely temporary pressure tools but are indicative of structural changes in the international order.” Rezvanpour explained that “the world is moving toward a new kind of polarization; on one side is the Western bloc led by the United States, and on the other are Russia, China, and their allies. This process is gradually creating a multipolar international system. Many developing countries, such as India, Brazil, and South Africa, are also trying to position themselves in the middle ground and benefit from cooperation with both blocs.”

He said: “This situation has led to the formation of what can be called a ‘middle world’—a group of countries that are neither fully aligned with the West nor part of the Russia-China bloc but are trying to exploit the competition among major powers for their own economic and political interests.” According to Rezvanpour, “Western sanctions have also called into question the traditional concept of economic interdependence. The theory that countries are less likely to engage in war and tension due to economic interdependence is now challenged by the reality of the West using energy, trade, and the financial system as weapons against Russia.” The senior European affairs analyst emphasized that “this experience will lead many countries in the future to seek to reduce critical dependencies and establish secure and independent supply chains.”

However, Rezvanpour warns that “the continuation of this path could weaken liberal international institutions and rules, including the World Trade Organization and the dollar-based financial system. In response to this trend, countries such as Russia and China are establishing parallel mechanisms, including non-dollar payment systems and bilateral trade agreements. These developments, overall, could lead to the fragmentation of the global economy—a situation in which technical standards, financial networks, and supply chains will move toward fragmentation rather than integration.”

Securitization of the Economy and Strategic Competitions

Dr. Rezvanpour emphasized that “even if a ceasefire is established in Ukraine, the sanctions will not be completely lifted.” This university lecturer said that “some of these restrictions will be maintained as permanent leverage to change Russia’s behavior, and the country must prepare itself for a long-term confrontation with its economic and geopolitical consequences.” According to this expert, “the global economy is moving toward increasing securitization. Energy, food, technology, and even financial trade are no longer merely economic categories but have become key elements of national security for countries.” Rezvanpour explained that “this trend will cause future competitions among powers to intensify not only in military fields but also in the areas of technology, natural resources, and supply chains.”

The senior European affairs analyst believes that “China’s role in this will be decisive. Beijing, on the one hand, benefits from purchasing cheap resources from Russia and providing an alternative market. On the other hand, it is trying to position itself as the potential leader of a non-Western economic order. However, Moscow’s excessive dependence on Beijing could become a strategic vulnerability for Russia, as the balance in this relationship will shift in favor of China.” Rezvanpour finally emphasized that “the current economic war is not just a transient crisis but a turning point in contemporary history that could redefine the structure of international relations for decades to come.” According to this university lecturer, “The world is entering an era of strategic competitions, instability, and new blocs—a process that will transform not only economics and politics but also traditional concepts of security and international cooperation.”