Bloomberg: G7, EU discuss using $250 billion frozen Russian assets for Ukraine rebuild

The G7 and the European Union are exploring a plan to leverage over $250 billion in frozen Russian central bank assets to finance Ukraine’s post-war reconstruction, sources tell Bloomberg. The strategy includes issuing debt against these assets, with discussions still at a technical level.

byYuri Zoria

04/02/2024

2 minute read

Confiscation of Russian assets. Credit: Stanislav Glazkov

Bloomberg: G7, EU discuss using $250 billion frozen Russian assets for Ukraine rebuild

The G7 and the European Union are in discussions about a proposal to utilize over $250 billion in frozen Russian central bank assets as security for financing Ukraine’s reconstruction efforts, according to sources knowledgeable about the situation, Bloomberg says.

The proposal suggests that Ukraine’s allies might issue debt, secured by the frozen Russian assets, to finance the rebuilding of the war-damaged country. Advocates argue that, according to international law, Russia would likely be held responsible for reparations due to the destruction caused. If Russia were to refuse payment, the frozen assets could then be targeted to cover the claims, according to sources.

“Discussions are currently taking place at a technical level, meaning a political decision has not yet been taken, said the people, who spoke on condition of anonymity. One of the people said some countries want to move faster than others,” Bloomberg wrote.

The G-7 aims to have Russia pay for Ukraine’s reconstruction, holding Russian assets frozen until then. Legal and economic concerns have made G-7 countries, like France and Germany, wary of seizing these assets. A proposal could suggest creating a vehicle to issue bonds, backed by a prioritized use of assets held by Euroclear and banks, to fund the rebuild.

The talks are centered on addressing Kyiv’s long-term requirements, distinct from efforts to bolster Ukraine’s immediate economic needs. Recently, the EU approved a €50 billion aid package spanning multiple years. Meanwhile, discussions in the US about providing $60 billion in aid are currently at an impasse in Congress.

Earlier, the US Senate Foreign Relations Committee passed the Rebuilding Economic Prosperity and Opportunity (REPO) for Ukrainians Act 20-1. The bill has broad bipartisan support and, if passed, will set the scene for Ukraine to get hold of some $300 billion of Russia’s frozen assets worldwide.

EU moves to consolidate €260 billion in frozen Russian assets, paving way for Ukraine’s recovery

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