Russian money should be permanently fixed

Ukraine war

EU agreement: Russian money should be permanently fixed

The EU Commission wants to use seized Russian assets for Ukraine. Member States are now taking a first important step. However, one country is considering legal action.

Germany and other EU states have agreed to use a majority decision to create a legal basis for the use of Russian state assets for Ukraine. As a first step, it should be decided to prohibit the transfer of funds set in the EU back to Russia indefinitely, as the Danish EU Council Presidency announced.

Specifically, the main aim is to prevent a country like Hungary from being able to initiate the release of the frozen funds by vetoing EU sanctions decisions. Russian central bank funds are currently frozen via EU sanctions decisions, which must be extended unanimously every six months.

This regulation is seen as an obstacle to the plan to use the funds for long-term loans to Ukraine and only allow repayment to Russia if the country makes reparations payments after an end to its war of aggression against Ukraine.

In order to hold the Russian money indefinitely, Germany and the other EU states are now relying on Article 122 of the Treaty on the Functioning of the European Union. It stipulates that in the event of serious economic difficulties, appropriate measures can be decided with a so-called qualified majority.

Among other things, it is now said that Russia’s war against Ukraine continues to pose serious economic challenges. The transfer of funds to Russia must be prevented with the utmost urgency in order to limit damage to the Union’s economy. The regulation is expected to be formally adopted in a written procedure that ends this Friday at 5 p.m.

At the EU summit next week at the latest, Chancellor Friedrich Merz and other supporters of the plan hope to be able to persuade Belgian Prime Minister Bart De Wever to agree to the use of Russian funds. Without Belgium, implementation is considered extremely difficult because by far the largest part of the Russian funds that are to be used for Ukraine are managed by the Belgian company Euroclear. This involves around 185 of the total 210 billion euros in the EU.

The Belgian government has so far blocked the plan, citing legal and financial risks. Among other things, she sees the danger that Russia will retaliate against European private individuals and companies and, for example, carry out expropriations in Russia.

De Wever recently mentioned three conditions as prerequisites for Belgium to take part, regardless of the dangers. It must therefore be guaranteed that all possible risks are shared and that, from the first moment of implementation of the plan, there are sufficient financial guarantees to meet potential financial obligations.