Agreement to effectively sequester €190bn came late on Thursday after almost a year of negotiations
Lisa O’Carroll
21 March 2024
The Guardian
EU leaders have agreed in principle to commandeer a large majority of windfall profits generated from frozen Russian assets and give them to Ukraine. The agreement late on Thursday comes after almost a year of negotiations over the legal basis for the effective sequestration of €190bn held in the Belgian central securities depository Euroclear. The way was cleared for agreement after wording was tweaked to address opposition by Hungary to the money being used to arm Ukraine.
How the funds will be carved up has yet to be decided but the proposal was to use 90% on military programmes and 10% on reconstruction with the potential for some money to be diverted to EU funding of peace keeping missions around the world to meet Hungary’s concerns.
The move is still laden with legal risk, with the possibility that the money would have to be returned after the war if Russia launches legal action.
On Wednesday, the Kremlin said such a move would be a flagrant breach of international law, but EU diplomats said they were all agreed the profits or interest generated by the frozen assets could be used in Ukraine.
The move came after Volodymyr Zelensky urged EU leaders to increase support with more air cover to protect eastern cities from Russian bombardment, including the release of frozen assets. “The aggressor should pay the highest price for the war – this is in line with both the letter and spirit of the law,” he told EU leaders in a video address. He went further, asking EU leaders to also consider the capital held in the Belgian bank, something that is not being considered.
At their summit, EU leaders gave a further boost to Ukraine and Moldova’s bid to become members of the bloc, agreeing to ask the European Commission to “swiftly adopt the negotiation framework [for accession] without delay”.
They also agreed it was right to move forward on membership talks with Bosnia once they have met all conditions for reforms required to meet candidacy status.
Zelensky thanked the EU for the €5bn payment from the Ukraine Assistance Fund agreed in December and for the recent pledge of ammunition shells under an initiative launched by Czechia to procure weapons outside the EU. “If there is enough support for Ukraine, it will show Putin’s buddies that there will be enough support even if this insane person orders the expansion of aggression to other European countries,” he said.
Lisa O’Carroll is a journalist based in the United Kingdom. She is Brexit correspondent and senior reporter at The Guardian. She previously covered the financial crash and IMF bailout in Ireland and the Ebola crisis from West Africa. In 2000 she joined the Guardian’s first online team, as editor of mediaguardian.co.uk. She has worked for a number of national media in the UK and in Ireland.