The reported plan seeks to give US guarantees that the West would be able to tap into the immobilized funds for as long as needed
FILE PHOTO: Ministers attend a sitting in the central conference room at the European Parliament building. © Thierry Tronnel / Sygma via Getty Images
The EU is mulling a plan to freeze Russian assets indefinitely to allay US concerns about whether a $50 billion loan to Ukraine would be repaid, the Financial Times reported on Wednesday, citing internal documents.
The EU has frozen more than €200 billion ($217 billion) in Russian central bank assets following the start of the Ukraine conflict in February 2022, a move condemned by Moscow as “theft.”
Although Western countries have failed to agree on the outright confiscation of the money to support Ukraine due to legal concerns, the EU has developed a plan to use the interest generated by the frozen assets to finance a fund to procure weapons for Kiev, with the annual sum estimated at around €3 billion ($3.25 billion). The EU’s top diplomat, Josep Borrell, said this week that the first tranche of some €1.4 billion ($1.5 billion) will be sent to Kiev in early August.
To this end, G7 members agreed in June to provide Ukraine with a $50 billion loan to be financed by interest from the frozen Russian assets. However, the US has expressed concerns about whether the loan would eventually be repaid, as the bloc renews its sanctions against Moscow every six months.
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According to the document cited by the FT, to allay those concerns, 27 EU ambassadors will meet on Wednesday to discuss a proposal for the “open-ended immobilization of the Central Bank of Russia assets.” The plan also reportedly seeks to “provide G7 partners with the highest degree of predictability” when it comes to the loan repayment.
The British newspaper noted that while the document offers another solution to the credibility problem – namely, extending the renewal of sanctions from every six months to up to three years – only the option of indefinite sanctions will satisfy Washington.
“Option one is the only option. It’s difficult, but it’s the only route that gives certainty and is feasible,” an FT source said.
The plan must be approved by all EU members, which could be difficult to achieve given that Hungary – a frequent critic of Ukraine aid – has stalled similar efforts in the past, the article said.
Kremlin spokesman Dmitry Peskov has said that the EU’s push to use the “stolen” funds to buy weapons for Ukraine “won’t go unreciprocated.” He added that Moscow is looking into ways to impose legal consequences on anyone who made the decision to use the profits from Russian assets.
