The European Union is developing a new financial strategy aimed at generating additional billions of euros from frozen Russian assets by investing them in higher-risk instruments. This approach will allow for increased assistance to Ukraine, which continues to experience significant economic losses due to the war.
This is reported by Kyiv24
Plans for the investment fund
According to information, EU leadership is considering transferring nearly 200 billion euros currently held as frozen state assets of Russia in Belgium to a new investment fund. This fund will invest the money in riskier assets, allowing for higher returns from interest.
The main goal of these changes is to provide additional funding for Ukraine, especially in light of the potential reduction in external support. European officials believe that the new scheme will help strengthen the Ukrainian economy while reducing risks for the EU budget.
International and legal aspects
At the same time, the proposed solution does not involve the complete confiscation of Russian assets. Some EU countries, including Germany and Italy, oppose such a step, citing potential financial and legal difficulties. Therefore, the plan involves using only the interest from the assets, keeping the principal intact to avoid accusations of violating international law.
The EU hopes that by spending only the interest and leaving the principal untouched, it can avoid accusations of violating international law, writes Politico.
Last year, G7 countries agreed to provide Ukraine with 45 billion euros generated from investing such frozen assets. However, the EU’s share of this loan, amounting to 18 billion euros, must be fully repaid by the end of 2025. This raises questions about future funding for Ukrainian needs in 2026.
Discussions on further steps will begin during an informal dinner of finance ministers from the 27 EU countries in Luxembourg. The discussions are expected to last several months as EU countries seek to balance support for Ukraine with meeting internal financial obligations.