EU to explore plans of channeling confiscated Russian assets towards rebuilding Ukraine

Charles Michel, President of the European Council, urged capitals to initiate talks on channeling confiscated Russian central bank assets towards reconstruction efforts in Ukraine, which has sustained extreme devastation due to Russia’s rampant attacks. In a conversation with the Financial Times, Michel suggested that the $300 billion worth of the Russian central bank’s frozen assets can go into rebuilding Ukraine.

“It is a question of justice and fairness,” he said, emphasizing that “It must be done in line with legal principles — this is very clear.” Michel further added that he wants EU leaders to “give some impetus” to the talks and that there is “a serious political interest to make progress on the question and deliver on the question.”

Soon after the Russia-Ukraine war broke out in February last year, the European Union and its allies froze the foreign exchange reserves of the Russian central bank which were deposited in accounts overseas. Russia later confirmed that the sanctions had resulted in the freezing of $300 billion of its foreign exchange reserves.

Later on, several EU officials, including foreign policy chief Josep Borrell, suggested the idea of using the assets to rebuild the infrastructure that was destroyed in the war in Ukraine. Last week, the EU’s environment commissioner Virginijus Sinkevičius said on the sidelines of the World Economic Forum meeting in Davos, Switzerland, that the EU will be the “first ones” to rebuild Ukraine from the ground up.

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“Every day there is more and more of the infrastructure of Ukraine being destroyed. We will be the first ones… to rebuild Ukraine and that price tag for rebuilding Ukraine is increasing and increasing every day,” Sinkevičius said. “Those speculations that we won’t be able, for example, to use frozen assets, really scare me because I think Russia has to have full accountability. [The country] who has to fund the rebuilding of Ukraine is Russia,” he added.

Brussels has said in the past that the Russian assets have not been confiscated on a permanent basis and will be given back to Russia, provided the signing of a peace agreement. Sinkevičius agreed that the plan to divert assets towards Ukraine’s reconstruction has its fair share of risks, and must be executed by following all legal protocols. “Of course, it has to be legal. That’s the only way to get approval from member states and also from the international community. I don’t think it has to be only the EU. The rest of the G7 countries at least should join us on that,” he said.