Brussels is expediting the release of €2–3 billion to Ukraine from frozen Russian assets, tapping into profits earned at Euroclear. With US financial aid to Ukraine now dwindling, the European Commission aims to disburse the first tranche of funds as early as July, pending member state approval. The proposed plan, prioritising using the funds for military support over postwar reconstruction, is poised for debate among EU leaders, reports the Financial Times.
Euroclear has held approximately €190 billion in Russian assets since Moscow’s full-scale invasion of Ukraine in 2022, yielding profits amounting to €3.85 billion. The EU’s strategy to leverage profits rather than the actual assets is a result of disparity in opinions within the G7. The proposal is expected before a summit of EU leaders next week.
Originally earmarked for postwar reconstruction, the funds may now be directed towards military assistance due to the withholding of further US military aid by Republicans in Congress. Suggestions include purchasing weapons for Ukrainian forces or supporting the country’s defence industry.
Commission president Ursula von der Leyen proposed last month that the profits be utilised for acquiring weaponry for Ukrainian forces; however, the Financial Times suggests that this idea is likely to encounter resistance from member states, including Hungary.
100+ lawsuits
The EU’s plan will not apply retroactively, leaving nearly €4 billion in accumulated profits that Euroclear could use for covering legal fees amid ongoing litigation. The CSD, which handled €37.7 trillion in assets last year, is facing over 100 lawsuits in Russia over immobilised assets belonging to individual investors. Russian courts could potentially order the seizure of approximately €33 billion in western assets blocked at Russia’s central securities depository, the National Settlement Depository.