E.U. weighs riskier investments of frozen Russian assets to boost returns and raise more funds for Ukraine — Politico
The European Commission is considering transferring approximately 200 billion euros ($229.4 billion) in frozen Russian assets into a new, higher-risk investment fund that could yield greater returns, Politico reported, citing four people familiar with the discussions.
Most of the frozen Russian funds are held at Euroclear, a securities depository based in Belgium. Under the proposal, European officials would move the assets into a special E.U.-administered fund. While Euroclear is required to invest through Belgium’s central bank, the new structure would allow the money to be directed into riskier investments — though Politico’s sources did not specify what those might be.
The E.U.’s goal is to generate greater returns from the frozen Russian assets in order to expand support for Ukraine’s war-torn economy. At the same time, this option would not amount to confiscation — a step opposed by several E.U. countries, including Germany and Italy.
E.U. officials hope that by using only the interest generated from the funds — while leaving the principal untouched — they can avoid accusations of violating international law, Politico reported. Another advantage of creating a special fund is that it could help avoid a scenario in which Hungary vetoes the renewal of sanctions (which must be extended every six months), potentially leading to the frozen assets being returned to Russia.
E.U. finance ministers are expected to begin discussing the next steps for supporting Ukraine at an informal dinner in Luxembourg on June 19, according to Politico.
After Russia launched its full-scale invasion of Ukraine in 2022, more than 260 billion euros ($298.2 billion) in Russian Central Bank assets were frozen in the West. About 190 billion euros ($217.9 billion) are held at Euroclear, with the remainder in the United States. While Western governments have debated confiscating the assets outright, concerns about setting a legal precedent and undermining the eurozone’s financial stability have led them to a more cautious approach. Instead, they have opted to use the profits from the frozen funds. In 2024, those profits totaled 4 billion euros ($4.6 billion), which were used to service a G7 loan to Ukraine.