Russian assets are not the focus now, Brussels says as calls for action grow louder

Russian Assets Not the Focus as EU Reviews Ukraine Funding

Poinews.com – Russian assets are not the focus of the European Commission’s immediate work, Brussels says, despite growing calls from EU governments, Ukraine and members of the European Parliament to make greater use of frozen Russian central bank funds.

The Commission is instead concentrating on delivering financial and military support already agreed for Kyiv and assessing Ukraine’s additional funding needs with the Ukrainian government and the International Monetary Fund.

About €210 billion in Russian Central Bank assets remain frozen in Europe, with much of the money held by Brussels-based securities depository Euroclear. Supporters argue that the funds could help Ukraine without shifting the full cost onto European taxpayers. However, the issue remains legally and politically sensitive, especially in Belgium, while Euroclear faces a legal challenge from the Russian Central Bank.

Commission puts existing support first

Paula Pinho, the European Commission’s chief spokesperson, said discussions about the frozen funds have not been abandoned. But Russian assets are not the focus while officials work on more immediate financial priorities for Ukraine.

“That’s not the primary focus.”

Pinho said the Commission had already undertaken extensive work on the issue. Its current priorities include the gradual release of a €90 billion loan for Ukraine’s financial and military needs, as well as a detailed assessment of the country’s future funding requirements.

The review gained urgency after President Volodymyr Zelenskyy asked partners last month to cover a $27 billion, or €23 billion, shortfall in Ukraine’s Ministry of Defence. Kyiv has also identified €32.6 billion in budget needs for next year that remain uncovered.

Those figures prompted EU and IMF officials to examine how the gaps developed and what expenses they include. The task has become more difficult for Europe as support for a country defending itself against invasion must now be considered without US contributions.

Pressure grows to use frozen funds

Several member states want the Commission to revisit the issue. Sweden, the Netherlands, Poland and Spain, supported by the Baltic states, have asked Brussels to explore additional legal options for drawing on the frozen funds.

Ukraine supports that approach and has proposed an EU-owned custodian for Russian assets held at Euroclear. Supporters believe such a structure could help address Belgian concerns, since Euroclear is based in Brussels.

A cross-party group of 122 members of the European Parliament also called on the Commission to restart political discussions and advance the custodian proposal in an effort to overcome Belgian objections.

For the Commission, however, selecting a financing tool before Ukraine’s needs are fully defined would be premature. Pinho said officials must first determine the scale of the country’s extra requirements before deciding how to meet them.

“We never said that it was out of the table. It remains there as a tool.”

Legal concerns remain unresolved

The Commission tried last year to create a legal route for using the funds through a proposal containing several safeguards. The plan did not receive sufficient political backing at a crucial December summit.

Belgium strongly opposed the scheme, and Euroclear raised serious reservations. The proposal’s failure was a setback for the Commission, which had invested significant political effort in defending it.

Russian central bank reserves are covered by legal protections that have made governments cautious about confiscation or arrangements that could create financial and legal consequences. Belgian concerns have therefore persisted even as pressure to increase support for Ukraine has grown.

Economy Commissioner Valdis Dombrovskis said the Commission’s services were ready to re-engage and help identify a workable path. He did not, however, promise a new legislative proposal, indicating that any move would depend on stronger confidence among EU member states.

FAQ: EU frozen Russian funds and Ukraine

How much Russian money is frozen in Europe?

About €210 billion in Russian Central Bank assets remain immobilised in Europe, much of it held through Euroclear in Brussels.

Will the EU confiscate the funds?

No immediate confiscation decision has been announced. EU officials are assessing Ukraine’s funding needs while member states continue to debate legally viable options.

Why is Belgium important in this debate?

Belgium has a central role because Euroclear, which holds much of the frozen money, is based in Brussels. Belgian authorities and Euroclear have raised legal and financial concerns about possible measures.