EU mulls indefinite freeze on Russian assets: FT
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According to the FT, 27 EU ambassadors will meet on Wednesday to consider a proposal for the "open-ended immobilization of Central Bank of Russia assets."
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European Union Foreign policy chief Josep Borrell arrives for a meeting of EU foreign ministers at the European Council in Brussels on March 18, 2024. (AP)
The EU is considering freezing Russian assets forever to soothe US fears over the repayment of a $50 billion loan to Ukraine, the Financial Times reported.
The EU froze over €200 billion ($217 billion) in Russian central bank assets following the war in Ukraine.
Following an EU Foreign Affairs ministerial meeting in Brussels on Monday, foreign policy chief Josep Borrell announced that the first installment of 1.4 billion euros ($1.5 billion) in military aid to Ukraine, funded by the profits from frozen Russian assets, will be disbursed in early August.
The purported strategy wants to provide the US with guarantees that the West would be able to tap into the immobilized cash for as long as needed.
On June 12, the G7 stated that Russia must bear responsibility for the damages inflicted on Ukraine, which have surpassed $486 billion. They agreed to provide Ukraine with $50 billion by utilizing frozen Russian assets by the end of the year.
According to the FT, 27 EU ambassadors will meet on Wednesday to consider a proposal for the "open-ended immobilization of Central Bank of Russia assets." The strategy also apparently aims to "provide G7 partners with the highest degree of predictability" about debt repayment.
While the agreement offers another solution to the credibility problem, namely extending the renewal of sanctions from every six months to up to three years, Washington will only accept indefinite penalties.
One source told the FT that “option one is the only option. It’s difficult, but it’s the only route that gives certainty and is feasible."
The idea must be accepted by all EU members, which may be challenging given that Hungary has previously obstructed such initiatives.
Using stolen Russian funds will not go unreciprocated: Kremlin
According to Kremlin spokesperson Dmitry Peskov, the EU's desire to utilize the "stolen" cash to buy weapons for Ukraine "won't go unreciprocated." He also stated that Moscow is looking at measures to inflict legal penalties on anyone who decides to exploit the revenues from Russian assets.
On June 20, Russian Foreign Ministry spokesperson Maria Zakharova said Russia possesses a "wide arsenal" of economic and political countermeasures if the West seizes its sovereign assets, including a tit-for-tat confiscation of Western assets in Russia.
Zakharova highlighted that Russia has a substantial amount of Western assets, including funds and property, under its governance, warning that they could all be subject to seizure as part of the Russian response.
"All of it may be subject to Russian retaliatory policy and retaliatory actions. The arsenal of political and economic countermeasures is wide," she said, without revealing the nature of the possible retaliatory actions.
