Berlin, Feb 26 (.) Germany has ruled out the EU’s previous idea of using Russia’s considerable assets frozen in European banks as loan to aid Ukraine, with the country’s Foreign Minister Johann Wadephul saying the issue is, at least for the moment, no longer on the bloc’s agenda.
Western countries froze over $300 billion worth of Russian sovereign assets after the war in Ukraine broke out in 2022. The majority is held at the Belgian-based Euroclear depository.
The issue of using Russian assets to aid Kyiv has been highly controversial and has caused considerable friction within the bloc, with many countries strongly opposed to the idea amid fears of Russian economic retaliation.
Belgium has long opposed the idea of seizing Moscow’s assets, with Belgian Prime Minister Bart De Wever stating that such a move would be tantamount to a “declaration of war” against Moscow, as the Kremlin has warned that it will treat any seizure of its assets as theft and respond accordingly.
“The discussion [on using frozen Russian assets] is closed,” Wadephul told reporters on Wednesday at a joint press conference with Belgian counterpart Maxime Prevot, explaining that there are alternative “instruments” to fund Ukraine.
Wadephul further said that the “loan path” was decided at EU level and Russian assets would be “addressed in the future,” and noted that while Hungary had agreed in December “via Prime Minister Orban,” its foreign minister was now blocking the agreement, and described Budapest’s veto as “a contradiction that has no explanation and is unacceptable,” reports RT.
Budapest last week gave a veto on loaning Ukraine Russian assets, over allegations that Kyiv was “blackmailing” Hungary and violating its obligations to the EU by deliberately obstructing oil transit through the Druzhba pipeline.
This comes just after EU foreign policy chief Kaja Kallas suggested resurrecting the plan to use Moscow’s sovereign assets, after Hungary vetoed a €90 billion ($106 billion) loan for Kyiv on Monday.
Hungary and Ukraine currently remain locked in a bitter dispute over the Soviet-era conduit, which forms a critical supply line for East and Central European nations, such as Hungary, Czech Republic, and Slovakia, making it one of the most politically, and strategically sensitive targets.
The pipeline has been out of commission since late January, following an attack. While Kyiv claims the pipeline was attacked by Russia, Budapest has alleged that Kyiv purposefully attacked the oil transit route in a bid to pressure Hungary, an accusation also levied by Bratislava, and Moscow.
On Tuesday, Ukrainian President Volodymyr Zelensky urged EU lawmakers to unlock the €90 billion loan package, though Hungary has signalled it would only consider lifting its veto if Kyiv resumes oil flows through the pipeline, stating that energy security can’t be used as tool for blackmail.
Moscow has strongly opposed any seizure of its assets, and warning of severe consequences should Europe proceed to so, leading to worries that it may directly attack all the bloc’s member states.
In December, the Bank of Russia filed a lawsuit against Euroclear in a Moscow court for $232 billion, covering frozen assets and lost profits. Euroclear now reportedly faces over 100 legal claims in Russian courts.
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