The European Union Has Solutions To Use Frozen Russian Assets For Ukraine

Josep Borrell. (Source: Indonesian Ministry of Foreign Affairs)

JAKARTA - EU foreign policy chief Josep Borrell on Monday said the bloc had found a solution to the use of frozen Russian assets, after last week finance ministers held a meeting.

Borrel said he would submit a proposal on how to avoid member states blocking the use of funds from frozen Russian financial funds to support Ukraine.

"We have legal procedures to avoid any kind of blocking," Borrell said before a meeting of EU foreign ministers in Luxembourg.

As previously reported, EU countries will provide up to 60 percent of the US$50 billion loan promised by the main democracies Group of Seven (G7) to Ukraine.

The loan to Ukraine is supported by revenue from frozen Russian assets, the Italian economy minister said.

The G7 plan for Ukraine is based on multi-year loans that use interest from about 300 billion US dollars in confiscated Russian state funds, most of which are blocked in the European Union.

Speaking on the sidelines of a meeting of European finance ministers in Luxembourg last week, Italian Economy Minister Giancarlo Giorgetti said EU countries would contribute between "50 and 60 percent" of loan disbursement. That means, loans disbursed for Ukraine could reach 30 billion US dollars.

His remarks appear to contradict Italian Prime Minister Giorgia Meloni's statement, who at the end of the G7 summit in Italy this month said European countries would not be directly involved in the issuance of a loan of 50 billion US dollars.

"We will start discussing its portion for the US, Canada, Japan and the UK," added Giorgetti.

It is known that Russia's central bank reserves and other state assets were frozen based on the G7 sanctions imposed on the Moscow invasion of Ukraine in February 2022.

About 190 billion euros of the assets are kept in Euroclear, Belgium-based central securities storage agency, making the EU a key player in every plan to leverage these assets.

Russia itself firmly opposes the plan, warning of the consequences it has. President Putin said it was a theft and there would be a sentence. Foreign Ministry spokeswoman Maria Zakharova warned of countermeasures by confiscating Western funds and property under Russian jurisdiction.

Economists, lawyers and experts say one of Russia's most likely actions is confiscation of financial assets and securities belonging to foreign investors currently stored in a special "type-C" account, whose access has been blocked since the start of the war unless Moscow provides relief.

Zakharova said Russia had received "direct signals" from several G7 countries, they would not take part in the action "because they understand the cost will be very painful".

However, he did not name the country or provide further details to support the statement.