EU governments converge on options to use Russian frozen assets to help Ukraine

Jan Strupczewski
·2 min read
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FILE PHOTO: Commemorations marking the first anniversary of the Russian invasion of Ukraine, in Brussels
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By Jan Strupczewski

BRUSSELS (Reuters) - European Union governments are supportive of the idea to use the proceeds from frozen Russian assets to help finance Ukraine and they are converging on possible options, the European Commission said on Friday.

The 27-nation EU immobilised over 200 billion euros of assets of the Russian central bank and another 30 billion in private assets of Russian oligarchs over Moscow's invasion of Ukraine in February 2022.

Commission head Ursula von der Leyen said on Wednesday the EU executive arm would come up with a proposal on how to use these assets for Ukraine "before the summer break", which in EU jargon means before August.

"Discussions with Member States on the way forward are progressing well," Commission spokesman Christian Wigand said on Friday.

"There is overall support from Member States on this matter and further convergence on the options, so we believe it will be possible to find solutions," Wigand said.

EU officials have underlined that putting Russian assets to work for Ukraine is legally very tricky and noted that while seizing the capital itself might not be possible, there could be a way to divert the interest generated by the assets to Ukraine.

There is also the option of taxing the profits made by the custodians of the assets.

The Financial Times reported however, that the European Central Bank warned the Commission against swooping to claim money from custodians of trapped Russian assets because it could dent confidence in the euro and hurt financial stability.

"Some more issues need to be further clarified and, in particular, further coordination with our international partners, namely G7 countries, will be necessary with view to making a concrete proposal," Wigand said.

"We will seek also for further possible guidance from the EU summit next week," he said.

Von der Leyen said putting the Russian assets to work for Ukraine was all the more important to ease the burden of financing Kyiv that is now on the European Union budget, which has to deal with other issues like migration and the transition to a zero-emission economy.

(Reporting by Jan Strupczewski; Editing by Andrea Ricci)