The European Commission is working on a mechanism that would allow nearly €200 billion in frozen Russian assets to be transferred into a special fund and directed toward Ukraine’s reconstruction after the war.
Source: Politico, citing several European officials
Details: The media outlet writes that Brussels is testing the readiness of national governments to transfer the assets into higher-risk investments that could generate greater returns for Ukraine while increasing pressure on Russia, which continues to refuse to end its aggression.
Proponents also see the scheme as a step towards potential confiscation of Russian assets and their transfer to Ukraine as punishment for Moscow’s refusal to pay postwar reparations.
The plan, however, does not provide for immediate confiscation, which most EU countries oppose for financial and legal reasons.
On Saturday, the issue will be discussed for the first time by the foreign ministers of the EU’s 27 member states during an informal meeting in Copenhagen. A preparatory note reviewed by Politico mentions "further options for the use of revenues stemming from Russian immobilised sovereign assets".
"We hear that it’s more difficult to raise money [from national finances or the EU budget]. [But] we have those assets there and the logical question is how can we and why don’t we use those assets," Kerli Veski, Undersecretary for Legal and Consular Affairs at the Estonian Ministry of Foreign Affairs, told Politico.
Within the European Commission, the idea is being pushed by Economy Commissioner Valdis Dombrovskis and foreign policy chief Kaja Kallas.
The Baltic states and some other EU members have long demanded the outright confiscation of all Russian funds, but most countries — notably Germany, Italy and Belgium — remain opposed. Belgium is especially vulnerable to legal and financial risks, as Euroclear, the financial institution holding most of the Russian assets, is located there.
As a workaround, Brussels is considering creating a special fund modelled on the European Stability Mechanism (ESM). Such a fund for Ukraine could also be opened to G7 countries, including the UK and Canada, both of which advocate confiscation. This mechanism would allow frozen assets to be invested in riskier, higher-yielding instruments, thereby generating additional resources for Ukraine, Politico notes.
Quote: "Sceptics, including Euroclear CEO Valérie Urbain, worry, however, that EU taxpayers would have to bear the brunt of any losses resulting from the riskier operations.
The Belgian government has recently warmed to the Commission’s plan, said an EU official and a senior non-Belgian diplomat, while countries farther away from Russia, such as Spain, are also backing the idea."
blargney on August 29th, 2025 at 08:32 UTC »
If they want to put it in higher risk investments, they should just use it to invest in Ukrainian companies. If the Russians want to preserve the value of that money, they only have to stop.
Joarn on August 29th, 2025 at 07:53 UTC »
The title might be misleading for people out of the loop (like me):
The assets will not be confiscated as per the article:
It basically provides two reasons some countries are (now) against is: fear that the eu has to pay back losses in the frozen assets due to the high risk investments, and fear of escalation - this will make it easier to argue the full confiscation of the frozen assets. Which in turn will determine certain companies from investing in Europe.
Now my uneducated opinion: I say, less investment is more than fine. I get that you'll get less investments from countries that are likely to go to war with the EU. But companies are so quick to change countries when tax havens are involved, I'm sure they will gladly do some paperwork not to lose their assets.
Just ammend or change the eu law that talks about requiring the frozen assets to stay frozen and add a few extra requirements like not being at war on European ground or with European allies. This can also lift the fear of having to pay it back
Neethis on August 29th, 2025 at 07:05 UTC »
You can't start their recovery until they finish the war, and right now you can bet that €200 billion would be part of Russias terms for ending this mess.
Edit: just to answer apparent confusion in the replies, Russia can go fuck themselves. My point is that you cant rebuild while the place is still getting bombed.