Brussels to submit proposal to use more than 200 billion frozen Russian assets to rebuild Ukraine

Brussels – The European Commission says it is ready to unveil its plans to exploit Russian assets that  were frozen due to Western sanctions to rebuild Ukraine. The College of Commissioners will meet tomorrow (Dec. 12) in Strasbourg – where the plenary session of the European Parliament is underway – to discuss and approve the proposal on frozen assets in what will also be the college’s last meeting before the end of the year.

The chairwoman of the European Commission, Ursula von der Leyen, first mentioned the idea at the
European Council in late June with a cautious approach, calling it still a divisive and complex issue since it could pose risks to the international attractiveness of the euro. The Heads of State and Government then discussed it in more or less depth during the last European Summit in October when von Leyen estimated the value of these frozen assets targeted by the EU’s 11 sanctions packages at 211 billion euros.

On that occasion, the German leader anticipated the work of Brussels on the proposal, which should initially focus on so-called extra profits. In other words, the idea is to find a way to use the proceeds from such activities that currently benefit a limited number of financial institutions in the European Union. These extraordinary profits are already quite substantial, and the idea is to pool them  together and then channel them through the EU budget “en bloc” to Ukraine and for Ukraine’s reconstruction. The issue of using the proceeds from frozen Russian assets to help Ukraine with reconstruction is quite controversial and potentially divisive because it may pose risks to the international attractiveness of the euro.