BREAKING: The European Union is urgently considering how to utilize frozen Russian assets to bolster Ukraine’s defense and reconstruction efforts. EU foreign policy chief Kaja Kallas revealed this development after a crucial meeting of EU foreign ministers in Copenhagen earlier today.
Currently, approximately 210 billion euros ($A375 billion) of Russian assets remain frozen in the EU, a direct consequence of the sanctions imposed following Russia’s invasion of Ukraine. This significant amount has raised calls from Ukraine and several EU nations, including Estonia, Lithuania, and Poland, to confiscate these assets now to address Ukraine’s urgent funding gap, projected to be in the tens of billions of euros for the upcoming year.
However, despite the mounting pressure, EU heavyweights such as France and Germany, along with Belgium—which holds the majority of these assets—have dismissed the idea. They emphasize concerns over the legality of such actions and the potential repercussions on the euro currency. Instead, authorities highlight that profits from these frozen assets are currently being directed to support Ukraine.
“It is unthinkable that Russia will ever see this money again unless it fully compensates Ukraine for the damage caused by the war,” Kallas stated, reinforcing the EU’s position.
In a statement, Kallas confirmed that while there is a consensus on the need for an exit strategy regarding the frozen assets, immediate confiscation is politically unfeasible. Maxime Prevot, Belgium’s foreign minister, echoed this sentiment, stating that “confiscating them would trigger systemic financial instability and also erode trust in the euro.” He further rejected any proposals for a revised investment strategy regarding the profits from these assets, citing potential risks.
Last year, the G7, which includes the EU, agreed to utilize the generated profits to fund a $50 billion loan for Ukraine, illustrating the ongoing commitment to assist the country amidst the war. However, Kallas made it clear that while Belgium and other nations are hesitant to discuss asset seizures now, there is a unified agreement that “Russia should pay for the damages, not our taxpayers.”
Interestingly, Russia has indicated a willingness to consider using the frozen assets for Ukraine’s reconstruction, although it insists that a portion of the funds be allocated to areas under Russian control, further complicating the situation.
As the EU navigates this complex issue, the implications for Ukraine’s recovery and the ongoing geopolitical tensions remain critical. The situation is developing, and stakeholders are closely monitoring further discussions within the EU regarding the future of these frozen Russian assets.
Stay tuned for updates as this story unfolds, with significant developments expected in the coming days.
