Europe Plans To Use $200-B In Frozen Russian Assets To Rebuild Ukraine

Russian assets frozen in European accounts could generate billions of dollars a year for rebuilding Ukraine.

Photo Insert: One proposed approach would probably deliver about €3 billion ($3.3 billion) a year to Ukraine.

But can that money be used without breaching international law or damaging the euro’s international standing? European Union leaders grappled with that question at a meeting of the European Council in Brussels, Hanna Ziady reported for CNN.

“The European Council took stock of the work done regarding Russia’s immobilized assets,” the leaders said in a statement after the meeting, adding that they would continue to work on the issue “in accordance with EU and international law, and in coordination with partners.”

The World Bank (WB) estimates Ukraine will need at least $411 billion to repair the damage caused by the war. And the EU and its allies are determined to make Russia foot part of the bill.

One idea put forward in the EU is to draw off the interest on income generated by Russian assets. This approach would probably deliver about €3 billion ($3.3 billion) a year, says Anders Ahnlid, the director general of the Swedish National Board of Trade and head of the EU working group looking into frozen Russian assets.

“It’s the best way of using these assets in accordance with EU and international law,” Ahnlid told CNN, adding this is also the view of lawyers at the European Commission, which has promised to propose a way to tap frozen Russian assets within weeks.

“The Commission will come forward with a proposal and we will focus prudently on the windfall profits from the immobilized assets of the Russian central bank,” Commission president Ursula von der Leyen told reporters in Brussels Friday at the end of the two-day meeting.

But some EU member states, and the European Central Bank (ECB), have expressed concerns that even a carefully targeted plan could shake confidence in the euro as the world’s second biggest reserve currency.

The EU has been at pains to contrast the illegality of Russia’s invasion with its own strict adherence to the rule of law, James Frater also reported for CNN.

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