Unblocking €50 billion for Ukraine has bought the bloc some time, Paolo Gentiloni has said
FILE PHOTO: EU Commissioner for Economy Paolo Gentiloni is talking to media prior an Eurogroup meeting in the Europa building, the EU Council headquarter on January 15, 2024 in Brussels, Belgium. © Thierry Monasse / Getty Images
The European Union is cautious about calls to seize Russian sovereign funds, EU Economy Commissioner Paolo Gentiloni told the Financial Times on Tuesday.
The US and its allies froze an estimated $300 billion in Russian assets in February 2022, citing the military operation against Ukraine. There have been calls to confiscate these funds outright and hand them over to Kiev. Most recently, the Belgian government proposed creating a “special purpose vehicle” that would use the funds as collateral in case Russia refuses to pay the reparations Ukraine has demanded.
”We have a very gradual approach. We go step by step.. at the moment we took one single decision,” EU Economy Commissioner Paolo Gentiloni told the FT, referring to the move to seize an estimated $5 billion in interest from the frozen assets.
“We need common decisions and solidarity at the G7 level, but at the same time this is especially a European issue, because the assets are mostly here,” the Italian politician added.
The US has pushed for confiscation because its own $60 billion funding package had stalled in Congress. Last week, however, Hungary withdrew its veto from the EU’s plan to send Kiev €50 billion ($53.7 billion) over the next four years, after pressure from Brussels.
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“The fact that we decided and possibly the US is also deciding on financial support [for Ukraine] gives us a little bit more time to avoid addressing these issues in a rushed way,” Gentiloni told FT.
The bulk of the Russian assets are held by the Belgium-based clearing house Euroclear. The bloc’s officials have repeatedly acknowledged fears of what impact Moscow’s retaliation might have on both Euroclear and the EU currency itself.
”We’re entering uncharted waters,” Politico quoted an unnamed EU diplomat as saying on Monday. “Anyone would be worried about the potential consequences of asset confiscation.”
Russia has protested the freezing of assets as illegal and inappropriate, while making it clear that their seizure would be tantamount to “theft” and result in consequences. Moscow will respond in kind, Deputy Foreign Minister Sergey Ryabkov has said, adding he does not expect “any sensible actions or steps from Western adversaries.”
Anyone who makes such a move will face “decades” of lawsuits, Kremlin spokesman Dmitry Peskov said on Tuesday. “Encroachment on someone else’s property undermines the foundations of the entire economic system,” he added.
