EU considers trick to finance Ukraine from frozen assets

The European Commission has presented a new plan on how frozen Russian assets can be used effectively without direct expropriation, which could lead to legal disputes, reports the website Politico.

According to the proposal, the cash generated from interest on accounts with the ECB would be exchanged for bonds guaranteed by the EU, which would serve as a so-called “reparations loan” for Ukraine. Ukraine would only repay the loan once Russia has paid reparations.

Currently, nearly €200 billion in Russian assets are frozen in the EU, with the majority of them held by the Brussels-based institution Euroclear. This approach would allow for immediate financing of Ukraine without the legal risk associated with the direct use of the capital.

The proposal has so far met with only lukewarm enthusiasm, and no agreement has yet been reached. The Commission is expected to present a formal proposal shortly.

(mja)