The European Union has decided to freeze the assets of Russia's Central Bank held in Europe for an indefinite period, thereby removing a major obstacle to using these funds to help Ukraine defend itself against Russia.

Source: Reuters

Details: The EU is moving to indefinitely freeze Russian sovereign assets worth €210 billion, instead of holding a vote every six months on whether to extend the asset freeze.

This would remove the risk that Hungary and Slovakia could at some point refuse to extend the freeze, forcing the EU to return the money to Russia.

The indefinite freeze is intended to persuade Belgium to support the EU plan to use frozen Russian funds to provide Ukraine with a loan of up to €165 billion to cover needs in 2026 and 2027.

The loan would be repaid by Ukraine only once Russia pays compensation to Kyiv for war damage, effectively making the loan a grant that advances future Russian reparations payments.

EU leaders and the European Council are due to meet on 18 December to finalise the details of the reparations loan and resolve outstanding issues, including guarantees from all EU governments to Belgium that it will not be left bearing the costs alone if a potential lawsuit by Moscow succeeds.

Valdis Dombrovskis, European Commissioner for Economy and Productivity, said that solid guarantees are being prepared for Belgium.

Germany sees no alternative to the reparations loan and will provide €50 billion in guarantees, European diplomatic sources said.

Background:

• Russia's Central Bank has stated that the European Union's plans to use its assets are illegal and that it reserves the right to use all available means to protect its interests.
• In a separate statement the regulator said it was filing a lawsuit in a Moscow court against the Brussels-based financial institution Euroclear, which holds a significant share of these assets.

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