The European Union is debating ways of securing a loan agreed on the last G7 meeting to help Ukraine against Russia, possibly by using frozen assets of Russian central bank currently held in EU financial institutions.
During the June G7 meeting, members agreed to use interest on frozen Russian bank assets to back a $50 billion loan for Ukraine. Currently, EU institutions hold $300 billion in Russian banking assets, mostly located in Belgium.
However, Reuters reported that EU diplomats fear that the EU will not reach an agreement to use those assets. Under EU regulations, the bloc needs unanimity to keep Russian sanctions rolling for the next six months.
Many in European circles believe that Hungary will obstruct the move, as for months, they have been stalling European efforts to help Ukraine. Hungarian Prime Minister Viktor Orbán is the closer EU leader to Russia and Vladimir Putin, whom he met in an unprecedented meeting in June. To circumvent possible Hungarian obstruction, the EU is drafting two different proposals that will be voted on by EU ambassadors.
One proposal will have open extension periods at regular intervals on the basis of set parameters, defined in the EU draft seen by Reuters as “the end of the war of aggression and assurances of non-repetition, the payment of compensation by Russia, etc.”
A second proposal will extend the renewal of the sanctions regime to up to three years, in order to minimize potential disruptions by Hungary or other member states. Both proposals only target sanctions and assets related to the Russian central bank.
