Belgium announced on Wednesday that European Union ambassadors have reached an agreement on a law allowing the use of profits from frozen Russian central bank assets in EU countries to support Ukraine’s defense.
Four diplomatic sources within the bloc indicated that the approval of European ministers is still required for the law, which allocates 90% of the returns to a fund managed by the EU to assist Ukraine militarily, while the remaining 10% will support Kyiv through other means.
Following Moscow’s invasion of Ukraine in 2022, the Group of Seven froze around $300 billion in Russian financial assets.
Since then, the EU and the Group have been discussing how to use these funds to aid Ukraine and whether they should be used at all.
The United States has repeatedly proposed seizing the assets entirely, but Europe has rejected this idea, citing the risks to the euro and the massive legal ramifications.
Recently, Washington has pushed towards using the assets as collateral for loans to Ukraine.
Russian officials warned the West at the end of last April of a “harsh” response and “endless” legal measures if these assets are utilized.
As of February 15, frozen Russian assets yielded a net profit of €557 million, according to the financial results of Euroclear for the first quarter of this year. Asset profits amounted to €3.9 billion since last year.
An informed source stated that the value of Russian sovereign assets held by Euroclear could increase to up to €190 billion upon their cash maturity by 2028.
It is expected that the assets will generate exceptional profits of $5 billion annually, according to Bloomberg. Insiders suggest that the volume of immediate aid to Kyiv will depend on the length of the repayment period and the asset freezing duration.
Another option is for allies to issue $50 billion worth of bonds through a special-purpose vehicle backed by exceptional profits, according to Bloomberg agency
