An amount in the billions annually: EU states lay the foundation for the use of Russian money

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As announced by the Council of the Member States, two pieces of legislation were adopted on Monday. They stipulate, among other things, that extraordinary income from the central bank’s custody must be kept separately in the future. In a second step, the aim is to generate revenue for the reconstruction of Ukraine, which was attacked by Russia.

It is estimated that billions of euros could be earned annually because, according to the Commission, more than EUR 200 billion of the Russian Central Bank has been frozen in the EU and income from the safekeeping of the capital is constantly increasing. The Brussels financial institution Euroclear recently announced that it had earned around 4.4 billion euros in interest income in 2023 related to the sanctions against Russia. Euroclear is by far the most important institution in the EU holding assets of the Russian central bank.

Meanwhile, EU officials emphasize that the project is initially only about revenue that Euroclear generates unplanned due to EU sanctions against the Russian central bank. For the time being, no expropriation in the true sense of the word is planned.

One reason for this is legal concerns and likely retaliation. Moscow had already warned the EU last year not to seize the property of the Russian state or Russian citizens. For example, it would be conceivable that companies operating in Russia from EU countries would also be forcibly expropriated. Moreover, the direct use of Russian assets could also cause other states and investors to lose confidence in the European financial center and withdraw assets from the EU.

According to EU information on Monday, proceeds from the safekeeping of frozen funds of the Russian central bank could in the future be passed through the EU budget to the planned new financial instrument to support Ukraine. The so-called Ukraine Facility aims to provide financial assistance worth 50 billion euros by the end of 2027.

(SDA)

Source: Blick