【By Observer News Net, Wang Yi】 With the Ukraine-Russia peace talks not making much progress, the EU is now turning its attention to Russia's frozen foreign assets.

Reuters reported that on August 30 local time, Catherine Kallas, the EU's High Representative for Foreign Affairs and Security Policy and former Prime Minister of Estonia, made a statement at an informal meeting of EU foreign ministers in Copenhagen, Denmark, saying that unless Russia fully compensates Ukraine for its losses, it will never get back its frozen assets.

"We cannot imagine that these assets would be returned to Russia without being used for compensation if a ceasefire or peace agreement is reached," Kallas said at the meeting. She added that the EU did not see any intention from Russia to compensate Ukraine for its losses, "a way-out strategy must be developed" to ensure that the frozen Russian assets are used for Ukraine's defense and reconstruction after the conflict ends.

On August 30 local time, Catherine Kallas attended a press conference after the informal meeting of EU foreign ministers. Reuters

On the 28th, Ursula von der Leyen, President of the European Commission, also issued a statement saying that the EU will soon impose further sanctions on Russia and is pushing to use the frozen Russian assets for Ukraine's reconstruction.

According to the EU, currently 210 billion euros (approximately 1.75 trillion Chinese yuan) of Russian assets are frozen, with most (about 183 billion euros) held by Euroclear, a bank based in Belgium. The ownership of these assets belongs to the Russian Central Bank.

According to a report by Politico Europe on the 28th, Ukraine faces an 8 billion euro budget gap by 2026, and the EU is trying every means to provide funds for the country. According to a preparatory note, the European Commission plans to transfer the frozen Russian assets into a "special purpose vehicle" to be used for Ukraine's defense and reconstruction after the conflict.

The report said that the "special purpose vehicle" might be set up in the model of the European Stability Mechanism (ESM), and open to G7 member states. Specific details are still to be finalized, but overall, the EU hopes to establish a mechanism that gives it greater control over transferring Russian assets to Ukraine, to avoid EU member states using their veto power during the half-yearly sanction renewal vote to return the funds to Russia.

Moreover, the EU also plans to invest the frozen Russian funds in higher-risk investments to try to provide more funds for Ukraine. However, this has raised new concerns within the EU. Valérie Urbain, CEO of Euroclear, stated that if high-risk investments result in losses, European taxpayers would have to bear the consequences.

There has been long-standing division within the EU on how to handle the frozen Russian assets. Countries such as the Baltic States—Lithuania, Latvia, and Estonia—as well as Poland, have consistently advocated for seizing these assets to directly assist Ukraine.

Kerli Veski, Deputy Minister of Foreign Affairs of Estonia responsible for legal and consular affairs, bluntly stated, "We heard that it is difficult to raise funds from national budgets and the EU budget, and we already have these frozen Russian assets, so the logical question is how we can use them and why we should not use them?"

However, France, Germany, Italy, and Belgium repeatedly emphasized the importance of international law and financial stability, and firmly opposed "plundering."

Belgium's Deputy Prime Minister and Foreign Minister Prevost warned on the 30th that these assets are strictly protected by international law, "seizing them would trigger systemic financial turbulence and severely undermine market confidence in the euro." He also rejected the EU's proposed change in asset investment strategy, stating that the economic and legal risks were too high.

Last year, the EU and G7 reached a compromise amid disputes, agreeing to keep the basic part of the frozen Russian assets unchanged, but to convert the total 45 billion euros in investment gains into loans to Ukraine. On this basis, the EU provided an additional 18 billion euros in loans to Ukraine.

But this portion of funds will be fully disbursed by the end of this year, and the EU itself is facing a tight budget, leading it to seek funds to support Ukraine. Ukraine estimates that the budget gap could reach as high as 8 billion euros in 2026, while US President Trump is gradually reducing American aid to Ukraine, which has increased pressure on the EU.

Euronews on the 30th pointed out that seizing and using foreign sovereign state assets has almost no precedent in international law, and is considered a "legal minefield" by many experts. Hungary has recently taken the European Council to court, claiming that it violated EU law by aiding Ukraine through the "European Peace Fund" without Hungary's consent.

Russian State News Agency Sputnik analyzed on the 28th that the judgment would be significant, as if Hungary wins the case, the EU will not be able to provide aid to Ukraine under the framework of the "European Peace Fund" in the future. But if Hungary loses, it means the EU can continue to act despite the opposition of member states.

On the 13th, Alexander Fadeyev, Deputy Director of the Information and Press Department of the Russian Foreign Ministry, stated that the Russian side noticed that the European Commission had allocated a new batch of financial assistance to the Ukrainian government from the income of the frozen Russian Central Bank assets, which is an escalation of the Western economic aggression in the hybrid war against Russia.

Fadeyev responded that the West is trying to fabricate new false justifications to appropriate Russian assets or their management income, but this cannot change the criminal nature of its intentions. Russian President Putin has clearly legally characterized this action by the West as "robbery."

This article is an exclusive piece by Observer News Net. Reproduction without permission is prohibited.

Original: https://www.toutiao.com/article/7544578037715616302/

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