EU's prestige at stake with proposal to fund Ukrainian war effort with Russian assets

"The EU is now debating whether to release more than 92 billion from these Russian sovereign wealth funds to Ukraine as a reparations loan to help the country stay afloat. The decision, encouraged by the European Commission the EU executive and countries like Germany, will be the focus of the European summit on Thursday and Friday in Brussels. If approved, it would represent a qualitative leap in the EU's sanctions policy against Russia."

"With this initiative, Europe's prestige is at stake. Let's not fool ourselves. If we don't succeed, the EU's capacity for action will be seriously damaged for years, or even longer, declared German Chancellor Friedrich Merz on Monday in Berlin. But both Euroclear a company that manages the pipelines of the stock market, through which shares, sales and cross-border transactions circulate, ensuring that everything works smoothly and Belgium, the country where that entity settled decades ago, oppose the proposal."

"Meanwhile, Kyiv's European partners are clinging to the idea. Against a backdrop of very tight budgets, they maintain that this is the only viable and quickest way to throw Ukraine a financial lifeline at this crucial moment. The EU is now debating complex legal mechanisms to try to unblock the proposal and win over Belgium and a few other members, such as Italy, who are not entirely convinced."

Euroclear holds 193 billion in Russian funds, mostly belonging to the Central Bank of Russia, frozen since 2022 under sanctions. The EU is debating releasing more than 92 billion of those sovereign assets to Ukraine as a reparations loan to provide an urgent financial lifeline. The European Commission and countries including Germany support the proposal, which will be considered at the upcoming EU summit in Brussels. Belgium and Euroclear oppose the plan, and other members such as Italy, Bulgaria, and Malta express reservations or prefer alternative options like joint debt. Complex legal mechanisms are under discussion to try to overcome objections.

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