EU Seeks New Investments for Ukraine
The European Union is actively seeking ways to secure new financial resources for Ukraine, utilizing 200 billion euros from frozen Russian assets to establish a new investment fund with higher risks and returns.
This is reported by Politico, citing its sources.
EU's Plan to Generate Funds for Ukraine from Russian Assets
It is noted that some EU countries, such as Germany and Italy, express concerns about potential financial and legal complications. Meanwhile, the EU hopes that using only the interest on these assets will help avoid legal issues.
EU officials are considering transferring assets from the financial institution Euroclear, where most of the frozen funds are currently held, into a newly created fund managed by the EU.
According to Politico, the advantage of this fund lies in its ability to invest in riskier projects that could yield higher profits for Ukraine. However, it is still unclear which specific investments may be considered.
Under existing regulations, Euroclear is obligated to invest assets, many of which have already been liquidated, in the Belgian central bank. The returns there are minimal due to the risk-free nature of the investment.
Proponents of the new fund argue that the EU should generate more revenue from Russian state funds to support Ukraine in the long term, especially given the ongoing peace negotiations with Russia.
Another potential benefit of this approach is that the new fund could protect assets from the risk of Hungary vetoing the extension of sanctions, effectively returning these funds to Russia.
According to two sources, in recent weeks, the European Commission has held informal discussions with countries like France, Germany, Italy, and Estonia to find a legal way to keep the assets frozen, even if Hungary blocks the extension of sanctions. However, no final decision has been reached yet.
Critics warn that if the new fund's investments fail, taxpayers in EU countries may have to cover potential losses.
The EU is looking for unconventional financial options as its current budget of 1.2 trillion euros is already overloaded, and the new multiannual financial plan will only come into effect in 2028.
“Finding money within the current budget will be very challenging,” − noted one diplomat in a comment to the publication.
Moreover, due to economic constraints and the need for unanimous decisions to replenish the budget, officials doubt whether this can be achieved, especially since Hungary is likely to oppose such a move.
