European Commission considers permanent freezing of Russian assets

Brussels is considering a permanent freeze on Russian assets in the EU and using the profits from them to finance support for Ukraine. Abandoning this scheme could lead to annual EU expenditures of 5.6 billion euros. This is reported by UNN with reference to DW, The Financial Times (FT).

DetailsThe main condition for using Russian assets frozen in the EU will be their “permanent immobilization,” writes the Financial Times, citing a European Commission report obtained by the publication.

In addition, the document proposes creating a legal mechanism that would allow extending the freeze on Russian assets for a longer period than the current six-month periods.

The report states that if the plan to raise part of the funds frozen in the Belgian depository Euroclear within two years is not implemented, EU countries will either have to agree to joint borrowing, increasing the debt burden on national budgets, or allocate direct grants to Ukraine totaling about 140 billion euros.

According to the European Commission, both options will lead to additional costs and affect the level of deficit and debt of individual states. Servicing a joint loan will cost EU countries about 5.6 billion euros per year. Of this amount, France will pay almost 1 billion euros, Italy – about 675 million, and Belgium – approximately 200 million euros.

Currently, according to EU sanctions law, the freezing of Russian assets must be extended every six months. The largest volume of these funds is stored in the Euroclear depository in Belgium.

Belgian authorities fear that if any EU country vetoes the extension of the freeze, Russia could demand the return of its money. That is why Belgium last month did not support the EU initiative to use frozen Russian assets to support Ukraine unless other member states share the possible risks with it.

RecallRepresentatives of the EU and the Belgian government have not reached an agreement on the use of frozen Russian assets to finance Ukraine. Belgium demands legal guarantees and fears lawsuits, while the EU insists on a plan to use 140 billion euros.

Europe faces billions in losses without agreement on reparations loan for Ukraine – FT07.11.25, 16:05 • 2354 views