Early on Friday, European Union leaders made a decision not to use frozen Russian assets to support Ukraine’s defense of the country’s ongoing conflict with Russia.
Instead, 23 of the 27 EU member states will offer an interest-free loan worth 90 billion euros ($106bn). Following months of deliberation and tense discussions on Thursday night, Hungary, Slovakia, and the Czech Republic each received an exemption to pass the deal.
If Ukraine wants to avoid bankruptcy as soon as April, the European Commission has proposed a plan to use some of the bloc’s frozen Russian central bank assets. This is estimated to cost the country an additional 136 billion euros ($159 billion) over the next two years.
However, Belgian Prime Minister Bart De Wever had declined to agree to this without giving “ironclad guarantees” that Belgium, where the majority of the country’s assets are located, would be shielded from potential Russian legal retaliation.
If Moscow successfully files a lawsuit against Euroclear, a provider of financial market infrastructure (FMI) in the Eurozone, where the funds are held, Belgium estimated that it might be left owing billions of euros.
Hungary’s prime minister Viktor Orban referred to the plan as “the dead end,” while Slovakia and Hungary had also voiced strong opposition to it.
Vladimir Putin, the president of Russia, has claimed that using frozen assets to finance Ukraine would be theft-like.
How would the use of Russian assets have gone?
In order to provide Ukraine with an initial 90-billion-euro ($106bn) loan, the EU would have borrowed from Euroclear, a Belgian-based clearing house with assets worth more than 40 trillion euros ($47 trillion). Up until 2027, this will cover roughly two-thirds of Ukraine’s funding needs.
If Russia had agreed to pay Ukraine’s veterans for the war, the loan would only have needed to be paid back. According to the European Parliament, reconstruction costs from the war are estimated to be worth about $524 billion.
Which nations possess Russian assets that have been frozen?
Since the Ukrainian invasion of 2022, more than 289.5 billion euros (339.3 billion) of Russian assets have been frozen by Western nations, with the EU holding 209 billion euros (247 billion) of these. The largest share, 180 billion euros ($210 billion), is held by Belgium.
- Belgium holds 180 billion euros ($210bn)
- Japan holds 28 billion euros ($32.8bn)
- The UK holds 27 billion euros ($31.6bn)
- France holds 19 billion euros ($22.3bn)
- Canada holds 15.1 billion euros ($17.7bn)
- Luxembourg holds 10 billion euros ($11.7bn)
- 6.2% of Switzerland‘s total is $7.3 billion.
- US assets total 4.3 billion euros (5 billion).
Which EU members were against the use of Russian assets?
Numerous EU members, besides Belgium, are against the plan, with Belgium voicing concern that using frozen assets without solid EU guarantees is “fundamentally wrong.”
It warned that Russia could target Belgian property in Russia in response, and that other Russia-friendly nations could file legal claims against Euroclear as well.
Viktor Orban, the prime minister of Hungary, said that obtaining Russian assets would increase the conflict in Ukraine.
The European Union would like to take the money from one of the warring parties and then give it to another one, he said to reporters, “There are two countries that are at war. It’s not the European Union, it’s Russia and Ukraine.”
It is “marging into the war,” it says. We should not do that, the Belgian prime minister said.
Which nations’ assets have Europe frozen?
While Russia is the most well-known non-European nation with significant assets that have been frozen in Europe, several other nations outside of Europe are also subject to asset freezes as a result of the EU sanctions.
Most other countries on this list have mostly government-related assets, oligarchs, or specific state-owned companies frozen, compared to their entire national reserves, despite the EU’s unique situation, which has caused Russia’s situation.
The EU has placed asset freezes and a ban on making money available in at least 31 nations, according to the sanctions tracker from the European Commission. Other asset freezes occur directly as a result of EU decisions, including those regarding Venezuela, while many of the moves are mandated by the UN and then put into place by the EU.
Find out which other nations’ assets have the EU frozen, by looking at the table below.
In response to Venezuela’s demise of democratic rule and human rights abuses under President Nicolas Maduro, the EU frozen the assets of Venezuelan entities and individuals in 2017. The European Council only recently extended these measures until January 2027, specifically to those who committed serious violations.
The European Council imposed sanctions on Syria in 2013 including asset freezes and financial restrictions. Member states are prohibited from making any new commitments to the Syrian government, including grants, financial aid, or concessional loans.
These measures were in place to protest human rights violations committed under Bashar al-Assad’s regime, which was finally overthrown in December of last year. Any individuals or organizations that supported the regime and the production of chemical weapons were included in the measures expanded in 2014 as well.
The EU continued to freeze the Assad regime and the drug trade after the government was overthrown in December 2024, but it suspended some of these measures to support the political transition in Syria.
Which nations have been subject to asset freezes by the UK and the US?
The United Kingdom has frozen the assets of individuals and entities from 22 nations, with the majority of them being EU-sanctioned, according to the Office of Financial Sanctions Implementation (OFSI), which monitors financial sanctions.
Typically, assets are frozen using the Specially Designated Nationals (SDN) List. The US has almost completely frozen the assets of four nations, including Cuba, Iran, North Korea, and Russia, according to the Treasury’s Office of Foreign Assets Control (OFAC), which lists various sanctions levels. US President Donald Trump lifted US sanctions against Syria in an executive order issued in June of this year.
Source: Aljazeera
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