Russian assets frozen: EU gives guarantees to Belgium on financial risks

The European Council on Thursday gave guarantees to Belgium on the financial and legal risks surrounding frozen Russian assets. The windfall profits generated by these assets are expected to be used to repay a 35 billion loan to war-torn Ukraine.

Since Russia’s invasion of Ukraine in February 2022, the EU has imposed a series of sanctions against Moscow, including a freeze of Russian assets. Some 210 billion of assets of the Central Bank of Russia are thus blocked in the EU.

Belgium is particularly concerned by this issue, because the majority of these assets are housed within the Euroclear institution based on its soil. The kingdom has already decided to repay to Ukraine the taxes levied on Euroclear’s profits in this area.

A loan of 35 billion

To help Ukraine defend itself against Russia and rebuild its damaged infrastructure, Western countries want to grant it a loan of 45 billion euros by the end of the year. The EU is ready to provide 35 billion euros.

The trick: the exceptional income from frozen assets could be used to avoid having to reach into your wallet to repay the loan. Such an approach is delicate. For several months, Belgium has been raising awareness among its allies of the need to guarantee its exposure to risk, by pooling it.

In its conclusions of Thursday’s European summit, the European Council “welcomes the agreement on the use of extraordinary revenues from Russia’s immobilized assets”. He underlines that this will “ensure equitable sharing and solidarity between G7 partners as well as with Member States which are particularly exposed to financial and legal risks.”

The EU calls for respecting the commitment made at the last G7 summit in Italy to provide the 45 billion aid promised to Ukraine in the “military, budgetary and reconstruction” areas. She invites the High Representative and the European Commission to engage with Ukraine on each of these elements. “Subject to EU legislation, Russia’s assets should remain immobilized until Russia ceases its war of aggression against Ukraine and compensates it for the damage caused by its war,” add the Twenty-seven.