The European Union intends to generate hundreds of billions more euros from frozen Russian assets by transferring them to an alternative investment fund.

Source:Politico, citing European officials 

Quote:"The European Union is looking to extract billions of extra euros from frozen Russian assets by moving them into riskier investments – via a plan that would increase aid to Ukraine while avoiding accusations of stealing Moscow's money."

Four officials familiar with the proceedings told Politico that EU leaders are considering transferring nearly €200 billion of frozen Russian state assets held in Belgium into a new investment fund offering higher interest rates.

The assets were frozen in 2022 in response to Russia’s full-scale invasion of Ukraine. However, confiscating them outright could lead to legal and financial repercussions. The EU hopes that by using only the interest generated by these funds and leaving the capital untouched, it can avoid accusations of breaching international law.

Quote:"Members of the G7 group of industrialised countries last year agreed to give Ukraine €45 billion generated by investing the immobilised sovereign assets. The EU’s €18 billion share of the G7 loan, however, will be entirely paid out by the end of the year – raising questions on how Ukraine’s funding needs will continue being met in 2026."

Background:

• It was previously reported that Euroclear, a European depository and financial services company, planned to transfer €3 billion of frozen Russian funds to Western investors who operated in Russia and whose assets were seized by Moscow last year.
• Euroclear announced plans to seize and redistribute funds that had been frozen in Belgium and are part of the €10 billion owned by Russian companies and individuals sanctioned by Brussels.
• Ukraine’s Foreign Intelligence Service has reported that sanctions against Russia have caused many Russian companies to lose key assets abroad, including control over energy projects, banking licences, and participation in major infrastructure and defence contracts.
• It was also reported that Kirill Dmitriev, Russia’s Special Presidential Envoy on Foreign Investment and Economic Cooperation, is attempting to shield frozen Russian assets worth US$280 billion.

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