The EU has a new idea for how to pass billions of frozen assets of the Russian Federation to Ukraine

The European Commission is considering a new idea of ​​sending billions of euros of frozen Russian assets to Ukraine.

Source: “European Truth” with reference to Politico

Details: According to the newspaper, it is about replacing the money transferred to Kiev, promissory notes provided by the EU.

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Brussels is trying to solve one of the most pressing problems since the beginning of the war – the West can confiscate interest received from Russian assets, but not huge amounts of capital that could significantly affect Ukraine’s ability to defend itself and recover.

A new proposal, which one official called “legally creative” can release a significant flow of additional financing for Kiev’s military efforts without the technical expropriation of the Russian assets themselves, which would be legally risky.

According to four officials who were informed on this issue, representatives of the European Commission offered this idea to deputy finance ministers at the closed door in Brussels on Thursday. The proposal was perceived with cautious enthusiasm, but no arrangements or obligations have been reached. One of the officials said the official proposal may appear soon.

Almost 200 billion euros of Russian assets were frozen after Moscow’s full -scale invasion of Ukraine in February 2022. Most assets are in the Brussels Euroclear financial institution.

Since Ukraine will face a budget deficit next year, EU countries are discussing new ideas to continue the funding of the country’s departed country against the backdrop of restricted internal budgets.

By exchanging cash for a short -term EU bonds with a zero coupon, the European Commission believes that it will allow it to avoid accusations of withdrawing money. According to officials, this idea has not yet been approved, and other options for using Russian assets are also on the table.

According to the Rules, any Euroclear assets subject to repayment must be transferred to a deposit account with the European Central Bank, which, in turn, pays interest on these funds.

So far, the EU has used the interest received to repay its share of G7 loan of 45 billion euros, which will soon be fully paid to Ukraine.

Prehistory:

• Now that the money is over in Ukraine, the commission has proposed to use these monetary deposits at the ECB to finance “repair loans” to help support Ukraine in the coming years.
• The President of the European Commission Ursula von der Liaien has announced the need to develop a new decision on Ukraine’s military financing on the basis of frozen Russian assets.
• Last week, the Minister of Foreign Affairs of Belgium repeated the decisive position of his country on the inadmissibility of confiscation of frozen Russian assets, which are mainly stored in Belgian banks to assist Ukraine.
• The alternative, proposed by the United Kingdom, has also rejected the potential transfer of frozen assets to a separate investment fund.