BRUSSELS – The European Union has definitively approved that Russian state assets deposited in European financial institutions will remain frozen indefinitely. The decision was adopted by member states in a written vote, where a qualified majority was sufficient. According to information from Czech diplomats, Czechia voted in favour, while Hungary and Slovakia voted against. The information about the vote was confirmed by both Reuters and Euronews.
According to these sources, the EU is blocking roughly 210 billion euros, most of which – around 185 billion euros – is held in a Belgian securities depository Euroclear. Further funds are held in banks in Belgium, France and other Member States.
End of six-month extension
The decision represents a fundamental change to the existing mechanism. Until now, states had to unanimously confirm every six months that Russian assets remained frozen. According to Reuters Concerns about the veto, particularly on the part of Budapest, were one of the main reasons why the Commission proposed a permanent block through the crisis clause in Article 122 of the Treaty on the Functioning of the EU.
According to Euronews This mechanism is commonly used in exceptional situations – such as an energy crisis or a pandemic – and allows the unanimity threshold to be bypassed.
Sources from the European Commission, as reported by Ukrainian media, including Ukrainian truths, state that permanent freezing removes a key obstacle to the EU's plan to create large „reparation loan“ for Ukraine. This should be covered by profits from Russian assets. These revenues are to be used in the coming years to finance Ukrainian defence and post-war reconstruction.
Hungarian Prime Minister Viktor Orbán By Reuters described the decision as „illegal“ and claims that the use of a qualified majority violates the EU legal framework. According to the Hungarian government, the freezing of assets without regular unanimous consent is contrary to the treaties.
Russian Central Bank according to information from the Russian agency TASS described the EU's decision as „illegal“ and „violating the principle of sovereignty“. At the same time, she confirmed that Moscow had filed action against Euroclear in a Moscow court and is preparing further legal action abroad. The topic was also widely covered by Financial Times, according to which Russia claims it is entitled to compensation for damages caused by blocking access to assets.
According to sources cited Euronews Concerns are also being voiced in Belgium, due to the risk that the state or Euroclear itself could face billions in legal disputes. Some economists warn that the use of foreign state assets without the owner's consent could undermine confidence in the European financial system and weaken the euro's role as a safe haven.
On 18 December, the European Council is set to decide on the detailed mechanism for using the proceeds from Russian assets. Following today's decision, a heated debate is expected – not only among Member States, but also with regard to the legal implications that Moscow is only just beginning to develop.
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