On Monday 24 June, European foreign affairs ministers reached an agreement on a legal framework that will allow most of the profits generated in 2024 by the Bank of Russia’s assets frozen in the EU to be allocated to the European Union’s military support for Ukraine (see EUROPE 13413/21).
This decision was made possible by “circumventing structural difficulty”, confirmed the EU’s High Representative for Foreign Affairs, Josep Borrell. “We understand that, legally, since one country did not participate in the decision to use the assets, it has not the right to participate on deciding to which purpose [the profits] are allocated”, he added, referring to Hungary’s opposition.
An initial amount of €1.4 billion will be paid in early July to the European Peace Facility (EPF), and a second amount of €1 billion in late 2024. These sums will be used to provide Ukraine with air defence equipment and munitions to enable it to defend itself against Russian military aggression.
Last Friday, the ‘Ecofin’ Council instructed national experts to put forward proposals, by mid-July, for implementing the decision by G7 countries to grant loans of up to $50 billion from 2025, to be pledged against the profits generated by the assets of the Bank of Russia (see EUROPE 13433/23).
Member States have not yet decided on the details or size of the EU loan (50-60% of the total?). In particular, there is the issue of risk sharing, given that the vast majority of the frozen assets are held in Belgium. Based on traditional macro-financial assistance, this loan would be adopted by a qualified majority of Member States. This would be a way around the Hungarian obstacle. (Original version in French by Mathieu Bion)