The European Council president has urged capitals to push forward with talks on using $300bn worth of confiscated Russian central bank assets for the reconstruction of Ukraine, as the scale of the destruction mounts in the war-torn country, Financial Times reports.
Charles Michel, who represents the bloc’s 27 national leaders, said he wanted to explore the idea of actively managing the Russian central bank’s frozen assets to generate profits, which could then be earmarked for reconstruction efforts.
“It is a question of justice and fairness,” said Michel in an interview with the Financial Times. “It must be done in line with legal principles — this is very clear.” Michel said he expected EU leaders to “give some impetus” in the discussions. He added that, despite the legal obstacles to seizing the assets, there was “a serious political interest to make progress on the question and deliver on the question”.
The EU and its allies froze hundreds of billions of dollars of foreign exchange reserves parked in overseas accounts by the Russian central bank early in the conflict, which began in late February last year. Moscow said subsequently that the central bank sanctions had frozen about $300bn out of its foreign-exchange reserves.
Officials from across the EU and its institutions, including Josep Borrell, its top diplomat, subsequently floated the idea of seizing those assets for use in rebuilding Ukraine’s ravaged infrastructure. The cost of reconstruction and recovery in Ukraine was last September estimated at just under €350bn by Ukraine, Brussels and the World Bank.
The likely sum required has only mounted since then as weekly Russian missile and drone attacks have damaged critical civilian infrastructure such as power stations and housing.
“Every day there is more and more of the infrastructure of Ukraine being destroyed. We will be the first ones… to rebuild Ukraine and that price tag for rebuilding Ukraine is increasing and increasing every day,” Virginijus Sinkevičius, the EU’s environment commissioner, told the Financial Times on the sidelines of Davos last Wednesday. “Those speculations that we won’t be able, for example, to use frozen assets, really scare me because I think Russia has to have full accountability,” he added. “[The country] who has to fund the rebuilding of Ukraine is Russia.”
Late last year the European Commission floated the idea of shifting the frozen assets of the Russian state into a fund, where they could be actively managed to generate profits to help pay to rebuild Ukraine.
Brussels suggested the underlying assets would not be permanently confiscated under the plan, but would be returned to the Russian state if a peace agreement were signed.
Michel’s call for movement in the area comes despite deep scepticism among some member states over the compatibility of asset confiscation with the rule of law, and warnings that any action would need to be carefully coordinated between allies.
