Stay informed with free updates
Simply register at War in Ukraine myFT Digest – delivered straight to your inbox.
EU member countries have backed a plan to set aside billions of euros from the freezing of Russian central bank assets as a first step toward potentially using them for Ukraine’s reconstruction.
Monday’s unanimous decision – which is still to be formalized in the coming weeks – is part of the bloc’s show of support for kyiv as the second anniversary of Russia’s full-scale invasion approaches. It also comes ahead of Thursday’s summit at which EU leaders are expected to approve 50 billion euros of financial support for Ukraine.
Of the 260 billion euros of Russian foreign exchange reserves tied up in 2022 in response to Moscow’s invasion, 191 billion euros are stored in Belgium’s Euroclear, a central securities depository, and generate billion as securities mature and are reinvested.
Under the agreement reached on Monday, profits generated by Euroclear will be accounted for separately and will not be paid out as dividends to shareholders until EU countries unanimously decide to put in place a “financial contribution to the (EU) budget which will be collected from these net profits. support Ukraine,” according to a draft text consulted by the Financial Times.
This levy will be “in accordance with applicable contractual obligations and in accordance with (EU) law and international law”, adds the text. There is no timetable for when such a separate proposal should be made. The proposal only targets future benefits and will not apply retrospectively.
Member countries will also determine the amount that central securities depositories can keep, in addition to the amounts needed to cover legal and management costs.
The European Commission’s proposals on asset management in December fell short of seizing profits and transferring them to the EU’s common budget, given fears from the European Central Bank and major capitals that this could trigger financial instability and provoke retaliatory measures from Russia.
Another US-led move backed by the UK, Japan and Canada to confiscate all Russian assets, rather than just profits, is facing resistance from European G7 members, including from Germany, Italy and France.