The European Union has approved the extension of a freeze on Russian assets, utilizing emergency powers as a significant measure to access funds intended for Ukraine. This decision comes after EU governments endorsed a proposal from the European Commission aimed at preventing any potential veto that could complicate the ongoing effort to secure a €90 billion loan for Ukraine, which relies on immobilized assets from the Russian central bank.
Currently, all 27 EU member states must renew the asset freeze every six months, raising concerns that certain countries, like Hungary, could block the renewal and jeopardize Ukraine’s financial support. The new measure seeks to shift away from the unanimous requirement, allowing the renewal to proceed with only a qualified majority, thereby securing up to €210 billion in Russian assets held within the EU.
EU leaders are looking to finalize the loan arrangement during their meeting in Brussels scheduled for December 18. Under the terms of the recent agreement, the European Commission will evaluate the situation on a yearly basis, ensuring that the funds remain frozen until it is determined that the exceptional circumstances for maintaining the freeze no longer apply, according to informed sources.
Hungary has criticized the change to remove the unanimity requirement, labeling it an “unfortunate precedent” that represents a significant shift away from established EU legal protocols.
The extension of the asset freeze aims to alleviate primary concerns raised by Belgium, which has delayed the Russian assets loan plan. Belgium, which manages a significant portion of the Russian funds through the Euroclear financial institution, expressed fears of being liable for the loan if the assets were to be unblocked unexpectedly. The country has been seeking guarantees from the EU and other member states to address this risk.
In a tactical move, negotiators separated the extension of the asset freeze from the more complex discussions surrounding the loan to Ukraine, as that issue remains unresolved. EU envoys plan to convene over the weekend to pursue a resolution, as Ukraine urgently requires these funds by April.
In related developments, Russia’s central bank announced it would be suing Euroclear and warned of a global retaliation campaign if the EU proceeds with the use of the frozen assets.
