EU Moves to Blockade Russian Assets in Response to Ongoing War
BRUSSELS — The European Union is planning to freeze Russian assets across Europe on Friday, a decision driven by the ongoing conflict in Ukraine that has persisted for almost four years. This action seeks to address the significant damage inflicted on neighboring countries during this time.
This blockade represents a crucial advance, allowing EU leaders to explore ways to utilize the considerable assets of the Russian central bank—for instance, to support insurance needs at an upcoming summit next week. The aim is also to assist Ukraine in managing its financial and military requirements over the next couple of years.
Hungarian Prime Minister Viktor Orbán, often considered a close ally of Russian President Vladimir Putin, has criticized the European Commission for what he describes as a violation of European law. He refers to their approach as a “systematic rape of European law.”
In total, around 210 billion euros (approximately $247 billion) of Russian assets have been frozen within Europe. Most of this amount, about 193 billion euros (about $225 billion) as of the end of September, is held at Euroclear, a financial clearing entity in Belgium.
The assets were frozen as a part of sanctions implemented by the EU following Russia’s invasion on February 24, 2022. However, these sanctions require updates every six months and need the approval of all 27 EU member states.
Halting further support to Ukraine has been a point of contention for Hungary and Slovakia.
The anticipated decision on Friday is grounded in provisions from the EU Treaty, which permits the bloc to safeguard its economic interests in emergency situations. This framework is intended to prevent the automatic renewal of sanctions and facilitate utilizing frozen assets.
Orbán expressed his concerns on social media, warning that this move would signal “the end of the rule of law in the European Union,” suggesting that leaders are placing themselves above established regulations. He echoed his commitment to restore legal order in Hungary.
Slovak Prime Minister Robert Fico communicated to European Council President António Costa that he would resist any initiatives that overly burden his country with Ukraine’s military expenses in the forthcoming years. He cautioned that the plan to use frozen Russian assets might jeopardize peace initiatives that rely on these resources for Ukraine’s reconstruction.
Despite these objections, the European Commission insists that the war has imposed substantial costs, including rising energy prices and stunted economic growth, noting that it has already provided nearly 200 billion euros (over $235 billion) in aid to Ukraine.
French Foreign Minister Jean-Noël Barrault characterized the expected action as “an important decision” that could significantly influence the war and hasten the peace process. He noted that Europeans are resolved to retain control over their financial decisions regarding these assets.
The plan would effectively prevent any use of the assets without European approval. There was a proposed 28-point peace plan orchestrated by U.S. and Russian special envoys that suggested that the EU could release these frozen assets for mutual benefit. However, both Ukraine and its European supporters dismissed it.
Belgium, hosting Euroclear, has voiced opposition to the “reparation financing” initiative, citing significant economic and legal risks. They urged other EU nations to share these potential burdens.
On the other hand, Russia’s central bank has filed a lawsuit in Moscow against Euroclear for damages due to state-imposed restrictions preventing it from managing its assets. Euroclear has refrained from commenting on the matter.
In a parental statement, the central bank denounced the EU’s overarching strategy to deploy Russian assets for Ukrainian aid as “contrary to international law and illegal,” claiming it infringes on the “principle of sovereign immunity over assets.”
