FT: Four EU countries urge Brussels to revive work on frozen Russian assets for Ukraine

The Financial Times has learned that Sweden, the Netherlands, Spain and Poland plan to urge the European Commission to resume work on a mechanism that would enable more than €200 billion in frozen Russian assets to be used to provide funding for Ukraine.

Source: European Pravda, citing the Financial Times

Details: Plans to provide Ukraine with funding from over €200 billion in Russian Central Bank assets held in the EU as part of sanctions fell through last winter after Belgium, where most of the assets are held, blocked the initiative.

A letter from the coalition of countries will call on the European Commission to resume work on the idea and seek an update on progress in the development of alternative legal and technical mechanisms that could circumvent Belgium's veto, four people familiar with the document told the FT.

Quote from Swedish Foreign Minister Maria Malmer Stenergard: "Now is the time to start a new discussion about how we can make further use of Russia's frozen assets for Ukraine's, and our, benefit."

Details: One source described the initiative as a call for the European Commission to carry out the technical work needed to make use of these assets and ease Kyiv's budgetary needs.

The letter is expected to be sent on Thursday 27 August.

As Kyiv is doing everything it can to protect its cities from Russian missile attacks, EU capitals are increasingly concerned that Ukraine will need additional funding beyond the €90 billion loan backed by the EU's budget.

Quote from Stenergard: "The €90bn loan is a manifestation of the EU's commitment to support Ukraine, but it is clearly not enough."

Details: Belgium still has the same concerns it raised last year. It fears legal retaliation from Russia and has warned of risks to financial markets if sovereign assets are used.

"Nothing has changed since the debate and disaster last time," one person familiar with the matter said.

The push to revisit the proposal to use immobilised assets comes as debate over the size and funding of the EU's next seven-year budget gains momentum.

Background:

• During a visit to Kyiv on 18 August, Belgian Foreign Minister Maxime Prévot said Belgium needs guarantees that it would not be left to bear the costs alone should Russia successfully challenge this decision in court.
• Ukrainian Foreign Minister Andrii Sybiha, meanwhile, said that now is the time to resume active discussions on frozen Russian assets and how they can be used to support Ukraine.

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