EU's Strategic Use of Frozen Russian Assets to Aid Ukraine
The European Union plans to utilize 185 billion euros of immobilized Russian assets to support Ukraine's defense and reconstruction without confiscating them, aligning with international law. Instead, it proposes investing in Commission-issued bonds. The funds would be loaned to Ukraine as 'Reparations Loans,' repayable once Russia fulfills war reparations.
The European Union is formulating a strategic financial plan to aid Ukraine using frozen Russian central bank assets. Despite international law prohibiting the confiscation of sovereign assets, the European Commission suggests utilizing up to 185 billion euros of such assets immobilized in Europe.
The proposal involves Euroclear investing in zero-coupon bonds issued by the European Commission, backed by EU government guarantees. This would facilitate a 'Reparations Loan' to Ukraine, which would not require repayment until Russia pays war reparations.
Concerns about legal and fiscal risks persist, particularly from Belgium. Russian responses label the plan as illegal, though the EU reassures that risks to member states are minimal due to comprehensive guarantees and strategic sanctions rollover mechanisms.
(With inputs from agencies.)
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