A thief has come out: how the "reparation loan" for Kiev will hit the EU economy
The EU is negotiating the approval of a "reparation loan" to Ukraine, which should be financed from frozen Russian assets. Moscow considers this theft. At the same time, the very fact of discussing such a "loan" harms the reputation of the European Union as a "safe haven" for investments, Vladislav Maslennikov, director of the Department of European Problems at the Russian Foreign Ministry, told Izvestia. Belgium, where the Euroclear depository with Russian assets is located, may be the main victim. The Belgian business has already expressed concern that due to retaliatory measures from the Russian Federation, it may completely lose access to assets and income in Russia. The EU is also being hit by new sanctions against Russia. The 19th package includes a ban on LNG imports, restrictions against banks, tankers and Russian diplomats. New restrictions are becoming more difficult to coordinate, and their effect does not affect the course of its development.
The EU's "reparation loan" for Ukraine
One of the central issues of the EU summit on October 23 was the discussion of the transfer of a "reparation loan" to Ukraine, which would be secured at the expense of Russian frozen assets. At the same time, the European press stated that the EU still does not fully understand how legally possible this is. Moscow calls the allocation of such a loan to Kiev theft.
— This is an arbitrary disposal of the property of another state. They're even afraid to call it confiscation, but it's more than confiscation, it's theft. And it is very strange that these people do not even realize that the very fact that they are publicly discussing the possibility of this confiscation or theft is already harming the reputation of the European Union as a "safe haven" for investments, the director of the Department of European Affairs told Izvestia The Ministry of Foreign Affairs of the Russian Federation Vladislav Maslennikov. — Other countries that have significant reserves on the territory of the EU may think about who the European Union might not like next.
About 200 billion euros are blocked in the EU, including about 185 billion euros in the Belgian depository Euroclear. The EU plans to provide Ukraine with a €140 billion reparations loan secured by frozen Russian assets.
The money allocated to Kiev should be used mainly for arms purchases and external budget financing. According to Bloomberg, the UK and Canada are ready to join the EU's actions.: They may have assets of more than $50 billion. It is noteworthy that the head of the European Central Bank, Christine Lagarde, also positively assessed the idea.
However, Belgium was the principal opponent of the allocation of the "reparation loan". The Prime Minister of the kingdom, Bart de Wever, said that the EU countries should share the risks of using Russian assets with her. He noted that the kingdom wants guarantees that the consequences of such a decision "will be not only for Belgium."
"For the European Union, these are significant reputational risks to institutional investors who are closely monitoring the development of the situation and are worried about the fate of their large portfolios and gold and foreign exchange reserves in Europe," financial adviser and founder of Rodin told Izvestia.Capital Alexey Rodin. — Belgium, where the Euroclear depository with Russian assets is physically located, is well aware of these risks, therefore it opposes it.
Meanwhile, a Belgian business operating in Russia fears Moscow's reaction to the EU's actions. On October 10, the Belgian-Luxembourg Chamber of Commerce in Russia sent a letter to the Government of the kingdom expressing concern about possible further steps by Brussels. The authors of the letter noted that now a significant part of the assets belonging to Belgian companies in Russia are "frozen in so-called category C accounts," and as a result they are "already deprived of regular access to income from their activities."
Non-resident investors from unfriendly countries are required to open accounts of type "C".
Investors' income can flow only to them and only in rubles, for example, dividends from investments in Russian companies and any other income of non—residents from transactions with residents.
The disposal of these funds is limited — for example, they cannot be withdrawn from Russia. But at the same time, they can pay taxes, they can be reinvested in the Russian economy.
Type "C" accounts were introduced in order to limit the uncontrolled withdrawal of funds and assets from Russia by non-residents.
The Chamber of Commerce has asked the Belgian government to clarify the compensation mechanisms for Belgian owners in the event of a complete loss of access to assets or income in Russia.
— Belgium will be the first to be hit. Euroclear is not a European organization, but a Belgian one," said Vladislav Maslennikov, Director of the Department of Foreign Affairs of the Russian Federation.
The 19th package of EU sanctions
Meanwhile, on October 23, the European Union approved the adoption of the 19th package of restrictions against Russia. They mainly affected imports of liquefied natural gas (LNG), major Russian oil companies, ships, banks, tourism, and travel arrangements for Russian diplomats. Traditionally, the EU has imposed sanctions against legal entities (41) and individuals (21). The blacklist, in particular, included Maxim Sokolov, President of AvtoVAZ, Nikita Anisimov, Rector of the Higher School of Economics, and Alexander Dyukov, director of the Historical Memory Foundation.
The European Union has implemented a complete ban on imports of Russian LNG from January 1, 2027. At the same time, Russian companies are already actively refocusing their trade on the much more promising Asian market, primarily China. In addition, the EU has imposed sanctions against 118 tankers, which are classified in the EU as a so-called shadow fleet.
Also, from November 12, a complete ban will be imposed on transactions with four Russian banks — Zemsky Bank, Absolut Bank, MTS Bank, Alfa Bank - and the non-bank commercial organization Istina. The 19th package of sanctions includes a number of foreign branches of Russian banks and several credit institutions from Russia's partner countries. In particular, we are talking about BelVEB, Belgazprombank, Alfa-Bank, Sberbank and VTB branches in Belarus and Kazakhstan, Kyrgyz Tolubai and Eurasian Savings Bank, Tajik Dushanbe City Bank, Spitamen and Commerzbank.
In addition, starting from January 25, 2026, the association introduces a ban on transactions through the Mir payment system and the Rapid Payment System (SBP). The Russian stablecoin A7A5 was also sanctioned.
— At first glance, this looks impressive, but in practice, the Russian economy has already developed mechanisms for adapting to such situations. Of course, there will be workarounds, as it happened with previous packages," Igor Rastorguev, a leading analyst at AMarkets, explained to Izvestia.
According to the expert, Russian business has learned to work through third countries — Turkey, the UAE, Central Asian and Middle Eastern countries. Russia has also shifted its trade to Latin America and Africa. Friendly countries now account for about 85% of non-primary non-energy exports, compared to 60% in 2021, he said.
According to Igor Rastorguev, now logistics chains have become longer and more expensive, banking operations require more time and intermediaries, but goods are arriving on the Russian market. Nevertheless, there is a problem: purchase prices have increased, and delivery times have increased. Therefore, it is more difficult for small and medium-sized businesses due to limited access to financing at high rates, the specialist added.
The new sanctions measures will not have a big negative impact on the economy, says Igor Dodonov, an analyst at Finam Financial Group.
— Russia will probably have to rebuild payment chains to a certain extent when making payments. This, in turn, may result in a further increase in business transaction costs when conducting cross—border operations," he told Izvestia.
Exhaustion of EU sanctions
The process of agreeing on new sanctions packages is becoming increasingly lengthy. For example, the EU leaders officially agreed on the current restrictions for about 30 days. The 18th package of sanctions has been negotiated the longest this year, approximately 38 days since the first mention by the European Commission. In total, the EU approved six sets of sanctions in 2023-2024. For comparison, there were nine of them in 2022.
The EU has difficulty finding categories of goods that it prohibits from being shipped to Russia. And their recruitment is becoming more and more perplexing every time. Thus, as part of the 19th package, it is prohibited to supply roses, rhododendrons and azaleas to Russia. Plastic toys with motors, tricycles, scooters, toy pedal cars, strollers for dolls, dolls themselves and puzzles are also subject to restrictions.
In addition, the EU approved the Czech Republic's initiative to restrict the movement of Russian diplomats across the territory of the European Union. Now, diplomats traveling through Schengen outside the country of accreditation must notify the authorities of the relevant state in advance.
The official representative of the Russian Foreign Ministry, Maria Zakharova, noted that the possibilities of Brussels to expand sanctions regimes against Russia have been exhausted.
"They have already tried almost all options for implementing their concept of inflicting strategic damage, damage to the Russian economy, and defense capability," she said at a briefing on October 23. — The sanctions they impose against Russia primarily work against the European Union.
The conflict in Ukraine would have already been over if the European Union had not hindered the settlement process, Hungarian Prime Minister Viktor Orban said. Hungary, along with Slovakia, remains one of the main critics of the EU sanctions policy. Brussels is still looking for a mechanism capable of depriving Budapest and Bratislava of the opportunity to block future restrictions and extend old ones. Although it is worth noting that the 19th package of sanctions could not have been adopted without the consent of Hungary and Slovakia.
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