The President of the European Commission, Ursula von der Leyen, said, on Wednesday 21 June, that the progress made by Ukraine in implementing the recommendations on reforms, which are a condition for the formal launch of negotiations on Kyiv’s accession to the European Union, meant that “the goal is in sight”.
“Despite the war, Ukraine has accelerated its reform agenda with impressive speed and resolve”, said Mrs von der Leyen at the international conference on the reconstruction of Ukraine in London. On the same day, the Commission presented EU countries with an oral report on “the progress made by Ukraine in judicial reform, the fight against corruption, and new laws on the media and national minorities”. “This reporting shows the goal is in sight and we will work with Ukraine to get over the finish line”, Ms von der Leyen added.
The European Commissioner for Enlargement, Olivér Várhelyi, made this presentation to the Member States’ ambassadors to the EU (Coreper) and will do so again at the informal meeting of European Affairs ministers in Stockholm on Thursday (see EUROPE 13205/6). This includes Ukraine and Moldova, two countries that have been official candidates for EU membership since June 2022, and Georgia, whose European perspective was recognised at the same time (see EUROPE 12978/1).
With regard to Ukraine, the Commission had recommended specific measures in seven areas: justice, the fight against corruption and money laundering, the implementation of the ‘anti-oligarch’ law, enforcement of law in the context of Ukraine’s security environment, the media and the reform of the legal framework protecting minorities (see EUROPE 12974/1). In its opinion, the conditions relating to the reforms of the judicial system and the media sector have been met, with further efforts required to comply with the other recommendations.
This progress report does not prejudge the opinion the Commission will form in the autumn when it will report in writing on the progress made by the three countries. It will then be up to the European Council to take up the matter, probably in December, and decide unanimously whether to open negotiations with Ukraine and/or Moldova.
Mobilising frozen Russian assets for the reconstruction of Ukraine
After describing the proposal put forward the previous day to stabilise EU macro-financial aid to Ukraine at €50 billion until 2027 (see EUROPE 13205/9), Ms von der Leyen also announced that the Commission would be submitting a proposal “ before the summer break” to mobilise “the revenues generated by the Russian assets tied up” to contribute to the reconstruction of Ukraine.
On Wednesday, Coreper was informed of the two options being considered by an Ad Hoc Working Party of national experts to mobilise the revenue generated by the management of the frozen assets of the Russian Central Bank and Russian public entities, which amount to more than €200 billion, more than half of which is in the form of cash or deposits with central securities depositories.
These two options consist of: (1) a prudent management of deposits by a conservative financial entity called ‘prudent asset custodianship’ and/or (2) a ‘windfall contribution’ which is a withholding tax on income generated by investments made using frozen assets. According to the expert report, these two options would generate the same amounts that could be mobilised for the reconstruction of Ukraine, at a rate of 3% per year. However, they raise different economic and legal questions, particularly concerning the possible liability of the EU budget in the event of financial losses.
The Swedish Presidency of the EU Council claims that “a more elaborate proposal” would provide better guidance for the work underway at technical level, and has asked the European Commission to consider the appropriate next steps.
To see the report by the EU Council’s Ad Hoc Working Party: https://aeur.eu/f/7mf (Original version in French by Mathieu Bion)