EU looks set to indefinitely freeze hundreds of billions in Russian funds
The European Union has indefinitely frozen hundreds of billions of Russian funds held in Europe to help Ukraine defend itself against Moscow.The bloc’s governments agreed on Friday to immobilise 210 billion euros ($246 billion) worth of Russian sovereign assets for as long as needed, thus removing the need to vote every six months on extending the asset freeze.Recommended Stories list of 3 itemsend of listThe indefinite freeze eliminates the risk that Hungary and Slovakia, which have better relations with Moscow than other EU states, might in future refuse to roll over the freeze, forcing the EU to return the money to Russia.EU Council President Antonio Costa said on Friday that European leaders had delivered on their “commitment” to immobilise Russian assets “until Russia ends its war of aggression against Ukraine and compensates for the damage caused”.The indefinite asset freeze is intended to convince a sceptical Belgium to support the EU’s plan to use the frozen Russian cash to extend a loan of up to 165 billion euros to Ukraine to cover its military and civilian budget needs in 2026 and 2027.The vast majority of the 210 billion euros in Russian assets, which were frozen as a result of EU sanctions on Moscow over its war on Ukraine, are held in Euroclear, a Belgian financial clearing house.It is expected that EU leaders gathering at the European Council on December 18 to finalise details of the reparations loan will offer guarantees to Belgium that it will not be left alone to foot the bill should a potential Moscow lawsuit prove successful.Belgium has said in the past that the plan “entails consequential economic, financial and legal risks”.Orban slams moveHungarian Prime Minister Viktor Orban, the Kremlin’s closest ally in Europe, railed against the expected decision earlier on Friday, accusing the European Commission, which prepared the measure, “of systematically raping European law”.He said the anticipated move means that “the rule of law in the European Union comes to an end, and Europe’s leaders are placing themselves above the rules.”“It is doing this in order to continue the war in Ukraine, a war that clearly isn’t winnable,” he wrote.Meanwhile, Russia’s Central Bank said on Friday that it had filed a lawsuit in Moscow against Euroclear for damages it claims were caused due to the stripping of Russian control of the frozen billions.Euroclear has been subject to Russian lawsuits in Moscow courts since the EU froze the assets in 2022.In a separate statement, the Central Bank said the wider EU plans to use Russian assets to aid Ukraine were “illegal, contrary to international law”, and in breach of “the principles of sovereign immunity of assets”.However, French Foreign Minister Jean-Noel Barrot wrote on X that the EU decision meant that “no one will decide in place of the Europeans the use of these funds”.Diplomatic pushThe legal battle over frozen funds is taking place as the United States pushes for a ceasefire deal between Moscow and Kyiv, which would consist of a framework for peace and separate documents on security guarantees and rebuilding Ukraine.This week’s flurry of diplomatic efforts saw Ukraine send back a revised version of the US-drafted framework, which was initially criticised as a Russian wishlist that bowed to Moscow’s maximalist demands and territorial claims in eastern Ukraine.On Thursday, Ukrainian President Volodymyr Zelenskyy said the US was proposing that a “free economic zone” be established in the Kyiv-held parts of the eastern Donetsk region, located in the Donbas, that Moscow wants to control.He said that Ukrainian troops would have to withdraw from the area, which Moscow has previously described as a “demilitarised zone”.On Friday, Kremlin adviser Yuri Ushakov said in comments published in Russian business daily Kommersant that it was possible that no troops would be positioned in the Donbas, whether Ukrainian or Russian.But, he added, “there will be the National Guard, our police, everything necessary to maintain order and organise life.”Ushakov also expressed the Kremlin’s doubts over efforts to amend the US framework. “We have an impression that this version, which is being put forward for discussion, will be worsened,” he said.On Friday, Ukraine’s Prime Minister Yulia Svyrydenko said on social media that Kyiv had held a new round of talks on reconstruction with US representatives Jared Kushner and Steve Witkoff, as well as World Bank chief Ajay Banga and BlackRock CEO Larry Fink.And the stage was set for more diplomatic activity next week, with Zelenskyy planning to attend the German-Ukrainian business forum in Berlin on Monday, where he will meet numerous European leaders, as well as the heads of the EU and NATO, according to German government spokesperson Stefan Kornelius.Zelenskyy announced on Telegram on Friday that a working group on security guarantees for Ukraine will meet in Germany, without specifying a date. The group will be headed by Lieutenant-General Andriy Hnatov, with representatives from the army, intelligence services and security forces.A French presidency official told reporters on Friday that security guarantees could resemble a NATO Article 5-type clause involving Washington that would seek to reassure Kyiv in case it was once again attacked by Russia.The official was cited by Reuters as saying that Ukraine, European powers and the US were still working to outline the contours of a peace deal that could be taken to Russia. “Our goal is to have a common foundation that is solid for negotiation. This common ground must unite Ukrainians, Americans and Europeans,” said the official.Fighting continuesAs the push for a deal intensifies, fighting continues to rage on the battlefield. Ukrainian forces said they had retaken parts of the front-line town of Kupiansk in the northeastern region of Kharkiv, and had encircled Russian troops there.Zelenskyy released a video visiting the area, where he praised the troops’ efforts and said their results were strengthening Kyiv’s hand diplomatically, as Washington pushes Kyiv to make major territorial concessions to end the nearly four-year war.“Today, it is extremely important to achieve results on the front lines so that Ukraine can achieve results in diplomacy,” Zelenskyy said in the clip, which showed him wearing a bulletproof vest at the entrance to Kupiansk.Ukraine’s Khartiia Corps of the National Guard said it had liberated several northern districts of Kupiansk, while Russian supply routes had been cut off and several hundred Russian troops were surrounded.In other movements on the battlefield, Ukraine said it had retaken the settlements of Kindrashivka and Radkivka in the northern Kharkiv region.Ukraine claims strikes in Caspian SeaAs the warring neighbours intensified their attacks far beyond the front line, Ukraine’s special forces have claimed to have hit two Russian ships transporting weapons and military equipment in the Caspian Sea, in an operation they said was carried out in coordination with a “local resistance movement”.The statement on Friday, posted on Telegram, said two vessels – the Composer Rakhmaninoff and the Askar-Sarydzha – had been struck off the coast of the Russian republic of Kalmykia. Both vessels had been sanctioned by the US for transferring military loads between Iran and Russia, it said.The statement said the operation had been carried out with the assistance of a resistance movement it named as “Black Spark”, which it said had provided detailed information on the ships’ movements and cargoes.It did not provide details on the location and nature of the strike, or the extent of any damage.The claim was made a day after a Ukrainian official said the country’s drones had hit a Russian oil rig in the Caspian Sea for the first time.
