EU proposes new choice to tap Russian money amid war: Report

The proposal comes as the bloc seeks ways to unlock funding for Kiev, Politico has reported, citing EU diplomats.

Earlier this year, Brussels suggested seizing the interest earned from the assets to acquire weapons for Ukraine rather than using the funds for reconstruction, as had been initially planned.

The proposed measure has faced resistance from some EU member states that are not part of NATO, including Austria, Ireland, Malta, and Cyprus. They have demanded an exemption from buying arms for Kiev, according to the article. Other vocal critics of the EU plan include Hungary and Slovakia, the outlet reported.

Under the EU’s latest attempt to win over member states, countries which oppose the plan can limit themselves to providing humanitarian aid to Ukraine, the outlet said, citing an EU document.

Brussels is now pressing ahead with the idea of creating two different tracks, according to officials – one in which the profits would be used for non-military aid, and a second aimed at buying weapons, from which neutral countries can opt out.

The West has frozen roughly $300 billion in Russian sovereign funds since the start of the Ukraine conflict. Brussels-based clearinghouse Euroclear holds around €191 billion ($205 billion) of the funds and has accrued nearly €4.4 billion in interest over the past year.

In March, EU foreign policy chief Josep Borrell proposed taking 90% of the revenues from Russian assets frozen in the bloc and transferring them to an EU-run fund that finances weapons for Ukraine.

The EU is aiming to give Kiev €2-3 billion in revenue generated by the assets this year. A first tranche of the money could be disbursed as early as July if Brussels can secure the approval of all member states.

The opt-out, however, may not appease Germany, France, and Italy, which are the least enthusiastic about the proposal due to the legal and financial risks, an EU diplomat told the outlet.

Russia has announced that any actions taken against its assets would amount to theft, stressing that seizing the funds or any similar move would violate international law and undermine Western currencies, the global financial system, and the world economy.