EU prepares to use profits from frozen Russian assets

2024-01-30 21:13:00, Kosova & Bota CNA

European Union countries have agreed to adopt a long-term deal to set aside, for use when needed, the benefits of the Russian Central Bank's hundreds of billions of dollars in assets in Europe, frozen because of the war. Moscow towards Ukraine, said an official of the European Union.

The deal, reached late Monday, still needs formal approval but is seen as the first step towards using some of the 200 billion euros ($216 billion) of the Russian Central Bank's assets in the European Union to help Ukraine rebuilds from Russian destruction.

The official, who asked not to be identified as the deal has not yet been legally approved, said the bloc would "allow the start of collecting extraordinary revenues generated by frozen assets ... to support the reconstruction of Ukraine."

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How the proceeds will be used will be decided later, after all legal and practical mechanisms have been considered.

What makes this step urgent is the fact that Ukraine is trying to ensure stability, while aid plans in the EU and the United States are being held back by political disagreements, including doubts about whether allies will continue to help Ukraine at the same rate as did in the first two years of the war.

EU leaders will meet on Thursday in hopes of approving a 50 billion euro ($54 billion) support package for Ukraine, with Hungarian Prime Minister Viktor Orban the only dissenter.

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Earlier this month, Ukrainian President Volodymyr Zelenskyy called for "strong" decision-making this year so that assets frozen in Western banks "go to defense against the Russians and reconstruction" of Ukraine.

The United States announced at the start of the Russian aggression that Washington and its allies had blocked access to more than $600 billion that Russia kept outside its borders, including approximately $300 billion in funds belonging to Russia's Central Bank.

Since then, the US and its allies have continued to impose a series of sanctions that have targeted companies and wealthy elites with ties to Russian President Vladimir Putin.

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According to a recent World Bank damage assessment in Ukraine, published in March 2023, the country's reconstruction and recovery costs will be $411 billion over the next 10 years, which includes public and private funding needs.

Belgium, which holds the rotating presidency of the Union, is leading talks on whether to confiscate Russia's assets. Belgium is also where most of Russia's frozen assets are held.

This country is collecting property taxes. Belgian Prime Minister Alexander De Croo said in October that 1.7 billion euros ($1.8 billion) raised in taxes could be used to pay for military equipment, provide humanitarian aid and help rebuild the war-torn country. / VOA