EU to freeze Russian central bank assets over Ukraine war

The European Union (EU) agreed on Friday to indefinitely freeze Russian central bank assets held in Europe over the war in Ukraine.

The EU wants to keep Ukraine financed and fighting as it sees Russia’s invasion as a threat to its own security.

To do so, European Union states aim to put to work some of the Russian sovereign assets they immobilised after Moscow’s 2022 invasion of Ukraine.

A first big step, which EU governments agreed on Friday, is to immobilise 210 billion euros ($246 billion) worth of Russian sovereign assets for as long as needed instead of voting every six months on extending the asset freeze.

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This removes the risk that Hungary and Slovakia, which have better relations with Moscow than other EU states, could refuse to roll over the freeze at some point, forcing the European Union to return the money to Russia, Reuters reported.

The indefinite asset freeze is meant to help convince Belgium to support the plan to use the frozen Russian cash to extend a loan of up to 165 billion euros to Ukraine to cover its military and civilian budget needs in 2026 and 2027.

The loan would be paid back by Ukraine only when Russia pays Kyiv war damages, making the loan effectively a grant that advances future Russian reparations payments.

EU leaders – the European Council – are to meet on December 18 to finalise details of the reparations loan and resolve remaining problems, which include guarantees from all European Union governments for Belgium that it would not be left alone to foot the bill should a potential Moscow lawsuit prove successful.

The Star