UK and EU negotiate to seize frozen Russian assets - Bloomberg
Photo: Russian assets to be confiscated in Europe (Getty Images)
The United Kingdom and the European Union will continue talks on how to freeze frozen Russian assets to jointly increase defense spending, Bloomberg reports.
UK Foreign Secretary David Lammy and EU chief diplomat Kaja Kallas will consider “innovative initiatives” to jointly increase European defense funding and military readiness at a meeting in London, the UK Foreign Office said.
The talks will include how Europe can ensure it has the right legal and financial arrangements in place to seize billions in Russian assets, the sources said.
Progress is being made despite resistance from some European countries, such as Belgium and Germany, which remain concerned that confiscation could violate the principle of state immunity under international law and affect the euro, the sources said.
“It is not the United States that has raised consistent concerns about sovereign assets...it’s actually within Europe,” Lammy told the House of Commons on March 17. A change of government in Germany could allow the country to change its stance on the issue, he said.
Lammy and Kallas will also discuss the EU's proposal to allow member states to invest €150 billion in EU loans for defense equipment, which can be spent on weapons from some third countries such as the UK, Norway, and Switzerland, the sources said. The UK will not have to pay into the fund, but it will benefit from EU states placing orders with UK defense firms.
Russian assets
Western countries froze Russian assets after Russia invaded Ukraine in February 2022.
Most of the money is in Europe. In particular, the amount of frozen Russian assets in the Euroclear depository (Belgium) is 183 billion euros. Ukraine will receive another tranche of EUR 2 billion in March 2025 from the proceeds of these assets. In 2024, interest on cash balances on assets under sanctions against Russia amounted to approximately EUR 6.9 billion.
In addition, the G7 countries will use future profits to provide a $50 billion loan to Ukraine. Kyiv has already started receiving this money. However, there is no consensus in Europe on the confiscation of Russian money because of fears of the consequences for the EU financial system.
Sanctions imposed on prominent Russian individuals have frozen another $58 billion in assets, including homes, yachts, and private jets.
