March 5. 2024. 9:41

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Baltics, Poland make push on use of Russia’s frozen assets ahead of EU summit


Poland and the Baltic states are expected to push EU leaders to accelerate work on the use of frozen assets to support Ukraine’s reconstruction, according to a joint letter seen by EURACTIV.

“Those frozen assets must be used as soon as possible; we cannot wait until the war is over and a peace agreement is signed,” they said in a letter addressed to European Council President Charles Michel, European Commission President Ursula von der Leyen and Sweden’s Prime Minister Ulf Kristersson.

The frozen assets should be used to “cover the cost of Russia’s aggression against Ukraine, including to support Ukrainian internally displaced people, as well as to the benefit of the future reconstruction of Ukraine,” the prime ministers of Poland, Latvia, Lithuania and Estonia wrote.

Thursday’s (9 December) summit thus “should have a conclusive political discussion” followed by “concrete guidance” to the EU’s executive on the matter, the countries wrote.

“This guidance will be the basis for the legislative proposal on the use of frozen assets to support Ukraine’s reconstruction, drafted without delay,” they added.

Circulating EU estimates suggest that Russian Central Bank assets frozen abroad could amount to up to $300 billion of which up to €33.8 billion could be located in EU-based deposits.

Last week, a joint EU-Ukraine summit declaration stated plans to ramp up efforts to use Russian frozen assets to fund reconstruction efforts for the damage caused by the war in Ukraine.

“The EU will also step up its work towards the use of Russia’s frozen assets to support Ukraine’s reconstruction and for the purposes of reparation, in accordance with EU and international law,” the statement said.

The EU has been exploring options to use frozen Russian assets following Russia’s invasion of Ukraine, but the proposal remains controversial due to a lack of legal framework or precedent and discussions remain at a very preliminary stage.

Last November, von der Leyen said she wanted to make Russia pay for the destruction from its invasion “with the frozen funds of oligarchs and assets of its central bank”.

The Group of Seven (G7) and EU officials have said that there do not appear to be clear legal grounds for simply seizing Russian bank assets and redirecting them to Ukraine.

The EU’s executive has warned that it would be difficult to take a decision until there is more clarity about the volume of assets that could be used, with the first step being to locate them.

The EU’s Council’s Legal Service last month told member states diplomats that such plans would be legally feasible, as long as the assets aren’t expropriated and certain conditions are met.

Such conditions would include a termination date, a focus on liquid assets and clarity that the principal and interest would be returned to Russia at some point, people familiar with the matter said, speaking on the condition of anonymity.

It is unlikely EU leaders will make a decision on the matter on Thursday.

“The EU together with partners is stepping up its work towards the use of Russia’s frozen and immobilised assets to support Ukraine’s reconstruction and for the purposes of reparation, in accordance with EU and international law,” EU leaders are expected to say in a draft summit communique, seen by EURACTIV.

Speaking in Kyiv to his Ukrainian counterpart last week, European Commission’s Executive Vice-President Valdis Dombrovskis said, “it’s important to start working with confiscated Russian state assets to make Russia pay for the damages it caused in this war”.

“We’ll soon present an EU proposal on the issue,” Dombrovskis added.

Ukraine reconstruction: Progress in coordination and use of Russian assets

There is progress in the use of Russian assets to fund reconstruction efforts in Ukraine, and donor countries have established a structure to better coordinate financial assistance, Commissioner Valdis Dombrovskis said during the EU executive’s visit to Kyiv.