EU discusses option to protect US$50bn G7 loan for Ukraine from Moscow’s retaliation – Politico
Pravda Ukraine
The European Commission is considering authorising the Belgian depository Euroclear to directly use frozen Russian assets to protect a US$50 billion loan to Ukraine from Russian retaliation.
Source: Politico, citing three sources in the European Union, as reported by European Pravda
Details: The Euroclear depository, which holds the largest share of Russian assets in the EU, is currently facing multiple lawsuits in Russia, where sanctioned Russian individuals and companies are seeking compensation for the seizure of their assets.
Russian courts are unlikely to compel Euroclear to surrender the assets. However, they may implement retaliatory measures against the depository’s balances held in Russian financial institutions. These funds primarily belong to Western financial institutions and companies, and if the Moscow regime recovers them, they could also pursue legal action against Euroclear.
Having joined the loan to Ukraine, which uses the proceeds from frozen Russian assets, the EU has proposed another solution: to set aside 10% of the windfall profits generated from these assets in a special account that the depository can use to pay compensation. However, concerns are rising that this amount may not be sufficient.
As a last resort, the European Commission is proposing to allow Euroclear to directly use frozen Russian assets to settle these claims, according to Politico, ensuring that the depository has sufficient funds for this purpose.
Proponents of the move argue that it would strengthen the G7’s US$50 billion loan to Ukraine and be more cost-effective. But the move requires the approval of all 27 member states, and it is unclear whether a consensus can be reached.
Background:
- Last week, the G7 finalised the parameters of a US$50 billion loan to Ukraine, which was agreed upon at the June summit in Italy.
- On 23 October, the United States confirmed it would contribute US$20 billion to the loan, the maximum expected amount. This decision had been uncertain until recently due to the EU’s inability to implement a safeguard against the unexpected lifting of sanctions, a condition that Washington sought and which was hindered by Hungary’s opposition.
- The contribution from the UK will amount to £2.26 billion, or US$2.94 billion.
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