On Wednesday 24 July, the ambassadors of the Member States to the European Union (Coreper) discussed options put forward by the European Commission to increase the legal security of loans to be granted to Ukraine by the G7 countries from 2025 by pledging them against future profits (€3 to 4 billion a year) generated by the Bank of Russia’s assets tied up in the EU.
The options identified by the Commission aim to extend the duration of the European sanctions targeting these Russian public assets in order to reduce the risk of non-renewal of these sanctions, which are decided every 6 months by unanimity of the Member States in the EU Council.
A source in the French Finance Ministry confirmed on Tuesday 23 July that “the difficulty lies in the legibility of a European sanctions mechanism that requires a review every 6 months”.
Coreper will continue these discussions in September, on the basis of a legislative proposal that the Commission could present at the end of July.
At the same time, the finance ministers of the G7 countries will be resuming their work on this issue alongside the G20 Finance meeting in Rio de Janeiro from 24 to 26 July.
The EU already has a mechanism for collecting this windfall revenue for 2024, which will be paid into the ‘European Peace Facility’. According to this French source, what remains to be put in place is a distribution mechanism to repay the loans, thanks to the windfall income that will have been granted by the G7 countries, in proportion to the GDP of each jurisdiction, to support the war effort and the reconstruction of Ukraine. (Original version in French by Mathieu Bion)