The EU is discussing how to transfer to Ukraine profits from 200 billion euros of frozen assets of the Russian Federation – mass media
The European Union is discussing the possibility of transferring to Ukraine the profits obtained from almost 200 billion euros of frozen Russian assets.
He writes about it Financial Times with reference to informed interlocutors.
Officials from EU member states and the European Commission met on Wednesday to explore options for transferring to Ukraine interest earned on Russian assets held at the world’s largest clearinghouse, Euroclear. Such a step does not involve the withdrawal of the assets themselves.
According to the Belgian government, the sanctions froze 196.6 billion euros of Russian assets in Euroclear, of which 180 billion euros are assets of the Russian central bank.
How will it work? Such frozen assets continue to generate income and Euroclear reinvests the funds. It is the profits received from reinvestment that EU officials want to direct to help Ukraine.
Euroclear typically lends its customers’ balances to minimize credit risk and keeps the interest earned. High interest rates from central banks, together with an unusual accumulation of payments due to sanctions, led to record profits – in the first quarter of the year, Euroclear reported EUR 734 million in interest on the balance of funds from Russian assets.
“It is not entirely clear who owns these interests,” said one of the FT’s interlocutors. The use of these percentages for the benefit of Ukraine is “unexplored territory”, “but we believe that it can be done”.
Some officials believe a similar principle could be applied to a wider range of frozen Russian assets, including those stuck in the Luxembourg clearinghouse Clearstream.
While the legal ramifications have yet to be analyzed, such a move would likely require wider international support as it could affect financial markets.
The EU is also considering the possibility of actively managing these profits to generate even more money, the interlocutors said. This can be done through an asset management company or through Euroclear itself, which will invest the assets according to instructions.
The Belgian government has separately said it plans to use tax revenues from profits from Euroclear’s frozen assets to help Ukraine. According to a government official, Belgium expects to earn at least 625 million euros in taxes from interest this year.
EU representatives intend to present more specific proposals regarding Russian assets at a meeting of EU leaders at the end of June.