EU Greenlights Immobilization of €210 Billion in Frozen Russian Assets Amidst Ongoing Support for Ukraine

In a significant advancement towards financial support for Ukraine, European Union countries have confirmed their agreement for the indefinite immobilization of €210 billion worth of frozen Russian assets located within the EU. This decision marks a crucial preliminary step as EU leaders prepare to discuss funding options at their upcoming summit next week. The agreement garnered support from a substantial majority of EU partners during a meeting of ambassadors, with 25 votes in favor and only two against, as reported by European sources to Europa Press. Notably, Belgium's backing reflects a complex position; while the country opposes the use of these assets for financing reparations, it still supports this initial immobilization measure. The formal adoption of this measure coincided with the announcement from the Bank of Russia, which has filed a lawsuit against Euroclear, the Belgian depositary entity that controls a significant portion of the frozen assets, claiming losses incurred from unauthorized use of these sovereign funds. In response to the lawsuit, EU Economic Commissioner Valdis Dombrovskis assured that all assets held in Europe are legally protected, stating that Article 122 of the EU Treaties can be enacted to prohibit any transfer of these blocked assets to Russia as long as the conflict persists. This legal framework allows EU nations to sidestep Hungary's veto, which has historically delayed decisions vital to Ukraine, including extending sanctions against Russia. Indeed, Hungary's government under Viktor Orbán has voiced strong opposition to the current sanction extensions, characterizing the measures as being improperly based on legal grounds in order to circumvent the usual unanimity required in EU governance. Despite Hungary's dissent, the agreement represents a pivotal movement towards a broader decision on utilizing the immobilized Russian assets. The European Commission has proposed using these assets' liquidity to finance a repair loan estimated at €90 billion for Ukraine’s reconstruction needs over the next two years. This loan would only require repayment from Ukraine if Russia ends its war and compensates the country for the economic damage caused. European Commission President Ursula von der Leyen has emphasized that the initiative can proceed with a qualified majority vote, navigating around Belgium’s opposition as the 27 member states engage in intense discussions to provide necessary assurances that might shift Belgium’s stance. Earlier this week, Antonio Costa, President of the European Council, expressed optimism regarding the agreement, suggesting that it would likely receive confirmation from the heads of state and government at the EU summit scheduled for December 18. Additionally, leaders from seven EU countries, including Ireland, Poland, and Lithuania, indicated their support for utilizing frozen Russian assets, viewing this approach as both financially viable and politically realistic. As the situation evolves, the EU continues to navigate the complex interplay of legal, diplomatic, and economic factors to ensure effective support for Ukraine while contending with internal disagreements on the best course forward. Related Sources: • Source 1 • Source 2