The European Union is aiming to reach an agreement by Friday to extend the freeze on Russian assets using emergency powers, a key step toward utilizing these funds to support Ukraine.
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The European Commission, the EU’s executive arm, is expected to soon present a proposal on the matter, with the goal of finalizing an agreement before the end of the week, according to sources familiar with the discussions.
The issue has become a major point of contention in the EU’s efforts to approve a €90 billion ($105 billion) loan to Ukraine using frozen assets from the Russian central bank.
Currently, renewing the asset freeze every six months requires approval from all 27 EU member states, raising concerns that Hungary or other countries could veto the decision, potentially allowing Moscow to claim its funds unexpectedly.
The Commission’s draft proposal suggests extending the six-month cycle while allowing each renewal to be approved by a qualified majority rather than unanimous consent, according to sources who spoke on condition of anonymity. This measure would ensure that Russian assets worth up to €210 billion remain within the EU.
The executive branch of the EU seeks to separate the extension decision from the broader issue of using the funds to provide loans to Ukraine, as this debate has not yet been resolved. Most member states support this approach, though some remain hesitant, while Hungary strongly opposes it.
The extension aims to address Belgium’s main concern, as it has previously blocked the asset-backed loan plan. Belgium hosts most of these assets at Euroclear and had warned it could be held liable for the loan if the funds were suddenly unfrozen. For this reason, Brussels is seeking strong guarantees from the EU and member states to mitigate such risks.
EU leaders aim to approve the loan during their meeting in Brussels on December 18. The plan, revealed by the Commission last week, involves transferring Russian funds to Ukraine over the next two years to cover essential services and economic and military needs, with the possibility of additional funds in 2028 and beyond. These funds would only be repaid if Russia compensates for the damage caused during the war. Nonetheless, Moscow retains a legal claim to its assets, heightening Belgium’s concerns about potential repercussions.
Bloomberg Al-Sharq
