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Russian Central Bank: $300 billion frozen

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Yuri Kochetkov/dpa

According to insiders, the EU states have agreed on a first step to use Russian money to rebuild Ukraine after the war. The EU representatives of the individual member states have reached an agreement in principle to set aside the Russian central bank's billions of euros in frozen assets in Europe, Belgian sources said on Monday.

The unanimously agreed text will be examined legally and linguistically before formal adoption. The EU Commission is therefore likely to propose that part of the proceeds from the money set aside be passed on to Ukraine for the reconstruction of the country. When and how this would happen was initially unclear.

Statements from the EU, Russia and Ukraine were initially not available. Germany and France have already expressed concerns about the plan described. The ECB has warned it could undermine confidence in the euro and destabilize global markets. The concern: Direct use of Russian assets could lead to other states and investors losing trust in the European financial center and withdrawing assets from the EU.

Expropriation not planned

The EU, the United States, Japan and Canada froze around $300 billion in Russian central bank assets in 2022, when Russia invaded Ukraine. About $200 billion of that is in Europe, mostly at the Belgian clearing house Euroclear.

The Brussels-based financial institution recently announced that it had made three billion euros in interest income in the first nine months of last year alone, which was linked to sanctions on Russia.

The G7 countries had recently been looking for ways to confiscate the frozen reserves of the Russian central bank. In this case, Russia threatened to retaliate - and announced at the end of 2023 that it would confiscate Western assets.

EU officials emphasized that the project is initially only about revenue that Euroclear is making unscheduled because of EU sanctions against the Russian central bank. For the time being, no expropriation in the true sense is planned.

One reason for this is legal concerns and the threat of retaliation. It would be conceivable, for example, that companies operating in Russia from EU countries would also be forcibly expropriated.

April/Reuters/dpa