{"id":640434,"date":"2025-12-18T15:02:13","date_gmt":"2025-12-18T15:02:13","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/640434\/"},"modified":"2025-12-18T15:02:13","modified_gmt":"2025-12-18T15:02:13","slug":"how-does-the-eu-want-to-use-russias-frozen-assets-for-ukraine-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/640434\/","title":{"rendered":"How does the EU want to use Russia\u2019s frozen assets for Ukraine? \u2013 The Irish Times"},"content":{"rendered":"

The European Union<\/a> is searching for a way to finance Ukraine\u2019s<\/a> defence and budget needs in \u200b2026 and 2027 with Russian<\/a> central bank assets immobilised in the West after Moscow\u2019s invasion<\/a>. <\/p>\n

Under international law, sovereign assets cannot be confiscated, so the European Commission<\/a> has put forward a plan to allow EU governments to use up to \u20ac165 billion \u2013 most of the \u20ac210 billion worth of Russian sovereign assets currently frozen in Europe \u2013 without confiscating them.<\/p>\n

How would it work?<\/b><\/p>\n

At the outset of Russia\u2019s war in Ukraine, Euroclear \u2013 the Belgian Central Securities Depository \u2013 was holding bonds for the Russian central bank. \u200dAs these bonds have matured, the resulting cash has become stuck in Euroclear because of EU sanctions against Moscow.<\/p>\n

The EU\u2019s idea is for Euroclear to instead invest in zero-coupon bonds issued by the European Commission. The bond coupon can be zero because under the legal arrangement Euroclear has with the Russian central bank, Moscow retains ownership of the capital, but does not have the right to the interest generated by the assets. <\/p>\n

The EU \u200cwould then use the cash to issue a \u201creparations loan\u201d to Ukraine, in tranches, according to needs. <\/p>\n

The loan would only be repaid by Ukraine once it receives war reparations from Russia in a peace agreement, effectively allowing Ukraine to spend the money now, rather \u2060than wait until Moscow pays.<\/p>\n

How much money is available?<\/b><\/p>\n

Some $300 billion (\u20ac257 billion) of Russian sovereign assets are frozen globally, according to various institutions, including the European Commission. This number does \u200cnot \u200binclude any \u200dfrozen assets of Russian oligarchs.<\/p>\n

Of that, \u20ac210 billion are held in Europe, of which \u20ac185 billion are with Euroclear. <\/p>\n

The EU initially wanted to base the reparations loan only on the money in Euroclear, but Belgium insists that the remaining \u20ac25 billion in Russian sovereign assets frozen elsewhere \u2060in the EU should also be included.<\/p>\n

[\u00a0The \u20ac90bn question: will Belgium sign up to frozen assets plan for Ukraine?Opens in new window<\/a>\u00a0]<\/p>\n

Most of that \u20ac25 billion is held in French banks, EU officials said. This complicates the project because, unlike the money in Euroclear, the assets generate \u2060interest that belongs to Russia. <\/p>\n

Under the Commission plan, the EU would use \u20ac90 billion of the frozen assets to disburse to Ukraine in tranches over 2026 and 2027. This amount could be increased, if needed, since there would be money left. <\/p>\n

The Commission estimates Ukraine\u2019s financing needs over the two years at \u20ac136 billion and expects countries outside the EU to contribute the remaining money.<\/p>\n

How would this be done without confiscating the cash?<\/p>\n

Russia would retain the claim on its cash in Euroclear and elsewhere. The Russian cash would simply be replaced with EU bonds of the same value on the balance sheet of the institutions holding it through a compulsory transaction with the EU.<\/p>\n

Who carries the financial risk?<\/p>\n

EU countries have to \u200cshare the risk of the whole project. The main risk is a scenario under which the EU has to return the cash to Russia but Russia has not yet paid the war reparations to Ukraine, therefore leaving the EU liable for the amount that has been transferred to Ukraine.<\/p>\n

[\u00a0Russia accused of intimidating Belgian leaders to block use of frozen assets for UkraineOpens in new window<\/a>\u00a0]<\/p>\n

EU governments agreed on December 12th that the immobilised Russian assets will \u200cstay frozen indefinitely, removing a serious risk that during one of the votes that take place every six months to keep the money frozen, which requires unanimity, one country could break ranks with others and force the EU to release the money \u2060to Moscow.<\/p>\n

What has Russia said? <\/p>\n

The Kremlin has described the proposal as an illegal seizure of Russian property and cautioned there would be retaliation for the theft of Russian assets. \u2013 Reuters<\/p>\n","protected":false},"excerpt":{"rendered":"The European Union is searching for a way to finance Ukraine\u2019s defence and budget needs in \u200b2026 and…\n","protected":false},"author":2,"featured_media":640435,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7654],"tags":[1789,2000,299,332,657,9041],"class_list":{"0":"post-640434","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ukraine","8":"tag-belgium","9":"tag-eu","10":"tag-europe","11":"tag-russia","12":"tag-ukraine","13":"tag-ukraine-crisis"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115741179556739967","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/640434","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=640434"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/640434\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/640435"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=640434"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=640434"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=640434"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}