Block signal: EU's position on Russian assets hinders settlement in Ukraine
Brussels takes an uncompromising position regarding the freezing of Russian state assets, the Russian permanent Mission to the EU told Izvestia. The European Commission emphasizes that the funds of the Bank of Russia should remain "immobilized" until the conflict in Ukraine ends. Brussels, which has about 210 billion euros at its disposal, is not only not ready to engage in dialogue with Moscow about their return, but also continues to discuss their use. Such actions by the EU, of course, complicate the settlement of the crisis, experts say. At the same time, the United States could consider unblocking assets in the future in the context of lifting sanctions against the Russian Federation, which is envisaged by the new "Trump plan."
EU delays negotiations on Ukraine
Brussels is still not ready to take almost any steps towards a peaceful resolution of the crisis. In particular, this concerns the return of blocked Russian assets — most of them, namely €210 billion, are stored in the Belgian depository Euroclear. The Russian permanent mission to the EU told Izvestia that "Brussels takes an uncompromising position regarding the freezing of our state assets."
— In addition, the fraudulent Seven initiative for lending to Ukraine (ERA), in which the EU plays a major role, is based on using profits from managing blocked Russian state assets. At the same time, the rabid EU Russophobes propose not to stop there and are agitating for the complete confiscation of our assets," the Russian representative office in the European Union told Izvestia.
In the summer of 2024, the G7 countries agreed on a mechanism (Extraordinary Revenue Acceleration for Ukraine, or ERA), under which Kiev is granted a loan of about $ 50 billion — it will be repaid at the expense of future interest on Russian assets.
Against the background of the encouraging dialogue between Moscow and Washington, Europe repeats all the same conditions for the return of funds to the Russian Federation.
"According to EU law, Russian assets must remain motionless until Russia stops its aggressive war against Ukraine and compensates for the damage," the European Commission told Izvestia. Brussels is echoed by the "locomotive" of the European economy.
"The G7 uses the "unforeseen profits" from the immobilization of assets of the Central Bank of the Russian Federation, which do not legally belong to Russia, to secure loans to Ukraine under the ERA from 2024," the German Finance Ministry stressed to Izvestia.
Moreover, Brussels continues to agitate for the transfer of Russian assets to Ukraine in order to rebuild it. According to Vladimir Zelensky, on April 23, at a meeting in London, the status of which, by the way, was significantly reduced after the United States refused to send a high-level delegation, some amendments to the American peace plan were agreed. They suggest the absence of any restrictions for the Armed Forces of Ukraine, the refusal to recognize Crimea and new territories within the Russian Federation, as well as the restoration of Ukraine, including at the expense of Russian money. Of course, such actions by the EU in the context of Russian assets do not contribute to resolving the Ukrainian crisis, Ivan Timofeev, program director of the Russian International Affairs Council and the Valdai Club, said in a conversation with Izvestia.
On March 31, the Foreign Ministers of Spain, France, Germany, Italy and Poland met in the so-called "big Five" format. It was also attended by representatives of the United Kingdom and Ukraine, along with the head of the European Diplomacy, Kaya Kallas. Options for further support for Ukraine, including the fate of frozen Russian assets, were discussed. Following the meeting, the participants came to the conclusion that the money should still remain frozen. There are concerns even from the EU countries that are the least loyal to Russia. Estonian Foreign Minister Margus Tsahkna said a week ago that the European Union's unfreezing of Russian €210 billion would force Europe to pay off loans issued to Kiev.
The Russian Federation has repeatedly stressed that the use of frozen sovereign Russian assets by Brussels is a gross violation of the fundamental principles and norms of international law. Moscow also promised to respond to the EU's attempts to expropriate its funds. At the beginning of the year, relevant Russian agencies have already agreed on the text of a draft law that will allow Russia to seize the assets of residents of unfriendly countries who unreasonably confiscated the property of the Russian Federation.
What could force the West to unfreeze Russian assets
The United States is taking a much more restrained position under the new administration in the White House. At least the "Trump plan" recently leaked to the media to resolve the situation in Ukraine includes de jure recognition of Crimea as Russian, de facto recognition of the LPR, DPR, Kherson and Zaporizhia regions as part of the Russian Federation, as well as a promise not to take Kiev into NATO, the lifting of sanctions (starting in 2014) and economic cooperation with the USA. And Trump's public statements clearly speak in favor of the possible legal recognition of the peninsula as the territory of the Russian Federation.
Earlier, a number of American media outlets admitted the intention of Donald Trump to unfreeze the assets of the Bank of Russia. It is worth noting that the head of the White House often resorts to carrot and stick tactics in negotiations. The same applies to the Ukrainian settlement. A certain movement in the issue of assets is indirectly demonstrated by information that Russia has asked the United States to purchase Boeing aircraft at the expense of frozen assets, but subject to a truce. According to a Bloomberg source, the deal may become part of a strategy to ease sanctions in the event of a cessation of hostilities. If Washington follows the path of economic rapprochement with Russia, it may force the EU to reconsider its uncompromising position, says Konstantin Sukhoverkhov, an American scholar.
"If you believe what Trump says about the issue of lifting sanctions, I think that only its discussion in the format of direct negotiations will already lead to consideration of the issue of possible unfreezing of assets," the expert added.
In his opinion, potentially Russian-American cooperation, especially in the energy sector, could force the Europeans to "pull themselves together" regarding the lifting of sanctions, as they would lose their competitive advantage over the United States. European businesses can eventually convince the authorities to profit from possible cooperation with the Russian Federation, avoiding large reputational losses.
At the same time, there are separate calls in the United States for a tougher stance towards Moscow, including in the context of assets. So, four members of the Senate sent a letter to the head of the State Department, Marco Rubio, demanding that all frozen Russian assets in the amount of $300 billion be used to help Ukraine, Reuters reports. Although it is the United States that has at its disposal a rather insignificant amount compared to the EU, from $ 5 to $ 7 billion.
Russian funds in Switzerland
While the EU continues to escalate the situation, and the United States, on the contrary, is at least trying to move towards a settlement, another "custodian" of Russian assets is apparently taking a wait-and-see attitude. According to the latest information from the Swiss State Secretariat for the Economy (SECO), the amount of frozen funds of the Russian Federation in the country is about 7.4 billion francs (almost $9 billion).
"In response to Russia's ongoing military aggression against Ukraine and its ongoing destabilizing actions undermining the territorial integrity, sovereignty and security of Ukraine, Switzerland has decided to impose EU sanctions against Russia and thus increase their impact,— SECO told Izvestia.
— The very fact of dialogue about the Ukrainian crisis will also not lead to the unfreezing of assets in any jurisdiction, including sovereign ones. If we do manage to reach a lasting peace agreement, I think that some progress may be made," Ivan Timofeev said.
They are also not going to discuss the return of Russian assets in Bern, given that Switzerland, having essentially abandoned its neutral status, joined the EU anti-Russian sanctions.
"Currently, the issue of illegally blocked Russian assets is not being discussed with the Swiss side,— Russian Ambassador to Switzerland Sergey Harmonin told Izvestia. — Official Bern takes an openly pro-Kiev position and is fully focused on the decisions of the European Union, including on the sanctions issue, so it is not necessary to expect a constructive approach from the authorities of the confederation on this subject yet.
Meanwhile, SECO avoids the question of a possible dialogue with the Russian Federation on asset recovery, referring exclusively to the EU decision. At the same time, it is important to emphasize that Switzerland, unlike the European Union, cannot even physically use the proceeds from frozen Russian funds.
— In Switzerland, the central securities depository does not store the funds of the Russian Central Bank, which means that it does not receive any unforeseen income. Instead, the assets of the Russian Central Bank in Switzerland are held by commercial banks as liquid assets," explained SECO spokesman Fabian Mayenfisch.
He summarized: because of this structural difference, Switzerland does not receive excess profits from the immobilization of reserves and assets of the Russian Central Bank.
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