EU discusses indefinite freezing of Russian assets to secure G7 loan for Ukraine

The EU member states have discussed the options of extending the term of freezing the assets of the Russian Central Bank in order to secure a US$50 billion loan for Ukraine from G7 countries.

Source: Reuters with reference to the draft document discussed in the EU and statements of unnamed diplomats; European Pravda

Details: Unnamed EU diplomats stated that some G7 members, including the US, fear that a time may come when there will be no unanimity among the 27 EU member states, which would jeopardise the entire loan for Ukraine.

Reuters reports that on 24 July, the EU ambassadors discussed two options aimed at alleviating the concerns of G7 members. One of them is extending the sanctions regime that has frozen the assets of the Central Bank of Russia for an indefinite term.

"This shall be reviewed by the Council at regular intervals (e.g. 12 months) on the basis of clear predefined criteria (i.e. the end of the war of aggression and assurances of non-repetition, the payment of compensation by Russia, etc.)," said the document.

The other option is to extend the sanctions regarding the freezing of Russian assets for three years.

Unanimity between the EU member states will still be required, and renewing the sanctions will only concern the assets of the Central Bank of Russia.

The EU diplomats told Reuters that the discussions are at an early stage. However, the Baltic countries and the countries of Eastern Europe are in favour of indefinite freezing, while France and Germany support a longer but still period of renewed asset freezes.

The diplomats say the European Commission will present the official proposal concerning this issue in late August or early September.

Background: 

• At the summit in June, the Group of Seven leaders gave their political consent to the use of excess profits from frozen Russian assets in their jurisdictions, which is approximately US$50 billion a year.
• The EU is expected to provide the most of the loan to Ukraine from the Russian assets. The first €1.4 billion of Russian assets is expected to be allocated to Ukraine for weapons in early August.
• In June, the EU reached an agreement concerning using a part of the excess profit from frozen Russian assets for military aid for Ukraine. The decision was adopted despite Hungary’s veto.

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