EU urged to use frozen Russian assets to ‘cover costs of aggression’ in Ukraine
Poland and the Baltic states have urged the EU to work on seizing frozen Russian state assets for the reconstruction of Ukraine “as soon as possible”, raising pressure to act on a legally fraught question.
In the run-up to a two-day EU summit that will discuss the Russian invasion, the leaders of Poland, Latvia, Lithuania and Estonia said that, “in order to be credible on this matter vis-a-vis Ukraine”, the bloc had to go beyond reiterating previous commitments and “accelerate our work in the council right now”.
The quartet of countries, Ukraine’s most outspoken allies in the EU, want western governments to use Russia’s €300bn (£266bn) of frozen central bank reserves to help Ukraine’s internally displaced people and start rebuilding the country.
“Those frozen assets must be used as soon as possible. We cannot wait until the war is over and a peace agreement is signed,” the four wrote in a joint letter to EU leaders Ursula von der Leyen and Charles Michel, and Sweden’s prime minister, Ulf Kristersson. Sweden currently holds the rotating presidency and is responsible for drawing up agendas for the EU council of ministers.
Last November, the European Commission suggested creating a structure to manage the €300bn of frozen Russian central bank assets and €19bn of Russian oligarchs’ money under EU sanctions. Officials said only the proceeds could go to Ukraine, amid uncertainty over the legality of seizing the funds.
Poland and the Baltic states appear to go further, arguing “all assets should be used to cover the costs of Russian aggression against Ukraine”.
A senior diplomat was not able to confirm whether all frozen assets would be seized for Ukraine in perpetuity, but said the proposal was more ambitious than the Commission’s idea of only using the proceeds of a fund to aid Ukraine. “But legal details are yet to be worked out,” the diplomat said.
An EU official said: “Legally, [the use of Russian frozen assets] is quite difficult, but the political push is there”. EU leaders wanted to make progress on the question and first of all had to map where the Russian central bank assets are, the official said.
Many legal scholars have argued that seizing Russian assets would be illegal under international law, undermining the rules-based order.
Other critics have described the idea as “seductive” but also “unnecessary and unwise”. In an article for the Brussels-based thinktank Bruegel last May, Nicolas Véron and Joshua Kirschenbaum wrote: “The Bank of Russia’s reserves are public money and thus altogether different from, though occasionally conflated with, the frozen assets of sanctioned Russians.” Bank of Russia funds acquired by the Russian state “in principle on behalf of the Russian people, cannot be generally assumed to have been illegitimate”, they wrote.
The idea is likely to come up at the EU summit on Thursday that the Ukraine president, Volodymyr Zelenskiy, will attend in what will be his first visit to Brussels since Russia’s invasion.
Zelenskiy’s trip to Brussels has been the subject of internal EU recriminations after details were leaked, posing security questions.
The Ukrainian leader visited London on Wednesday, where he met King Charles III and addressed MPs in parliament. That surprise visit – not leaked in advance – raised expectations he would go to Brussels on Thursday. An unpublished agenda note showed the European parliament decided on Tuesday to hold a last-minute plenary session this Thursday, suggesting Zelenskiy could address MEPs.
At the summit, EU leaders are expected to endorse Zelenskiy’s 10-point peace plan, which calls for the withdrawal of all Russian troops, restoration of Ukraine’s borders and a special tribunal for the prosecution of Russian war crimes.
On Thursday, European leaders are also expected to express support for a “peace formula summit, aiming at launching [the peace’s plan’s] implementation”, according to draft summit conclusions. The document also notes: “Russia has not shown any genuine willingness regarding a fair and sustainable peace.”