The European Union plans to confiscate the frozen Russian assets only if Russia refuses to finance the reconstruction of Ukraine, writes the German newspaper Welt. However, according to the newspaper, the assets will remain blocked until Russia pays reparations to Ukraine after the end of the conflict.
The publication notes that for two years the EU countries have been considering what to do with these assets and how to use them for the benefit of Ukraine. EU countries doubt there are legal grounds for confiscation and believe such a move would be in breach of international law.
However, there are big differences between the positions of the US and the EU on this issue, “Welt” emphasizes.
The newspaper commented that there are other reasons why, for example, Germany, Italy and France do not want to confiscate Russian assets. First of all, such a move could damage the reputation of the Eurozone, repel international investors and destabilize the financial market. Second, Russia announced that it would respond to such a move by confiscating Western assets still in Russia.
The publication states that the EU currently intends to tax separately the profits that central securities depositories receive from holding Russian assets and then send the profits to Ukraine. However, this profit tax is expected to raise only a single digit amount in the billions of euros, the newspaper noted. In addition, there is still no mechanism for sending the collected money directly to Ukraine, “Welt” summarizes.
Ultimately, after months of wrangling over the procedure, the first tranche of funds representing profits from frozen Russian assets could be released as early as July, if Brussels manages to get the approval of the member countries, writes in “Financial Times”, referring to European representatives. The proposal for the move is expected to be presented at a summit of EU leaders next week, the publication said.
The newspaper notes that European Commission President Ursula von der Leyen recently called for the funds to be used for military aid, rather than post-war reconstruction, as originally intended. This approach may cause concerns in some EU capitals, the publication commented.
The hotly debated question of whether to use Russian funds blocked at the Brussels-based central securities depository Euroclear to aid Ukraine has become increasingly pressing as the war enters its third year and international aid has dwindled. , notes the Financial Times.
According to the newspaper, although the EU initially planned to use some of the Euroclear funds for Ukraine’s post-war reconstruction, after further US military aid was blocked by congressional Republicans, the focus shifted to military support.
However, the Financial Times points out that this option is likely to be opposed by some member states, including Viktor Orbán’s Hungary.
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