The European Commission is exploring a mechanism to channel nearly €200 billion in frozen Russian assets into a dedicated fund to support Ukraine’s postwar reconstruction.
According to Politico, Brussels is assessing whether national governments are willing to transfer the assets into higher-risk investments, aiming to boost returns for Ukraine while maintaining pressure on Russia, which continues its aggression. Advocates view the plan as a potential step toward confiscating Russian assets as compensation for Moscow’s refusal to pay postwar reparations.
The proposal does not allow for immediate confiscation, which remains opposed by most EU countries for legal and financial reasons.
EU foreign ministers are set to discuss the plan for the first time on Saturday during an informal meeting in Copenhagen. A preparatory note, reviewed by Politico, references “further options for the use of revenues stemming from Russian immobilised sovereign assets.”
Kerli Veski, Estonian Undersecretary for Legal and Consular Affairs, told Politico: “It’s more difficult to raise money [from national finances or the EU budget]. [But] we have those assets there and the logical question is how can we and why don’t we use those assets.”
Within the European Commission, the initiative is championed by Economy Commissioner Valdis Dombrovskis and foreign policy chief Kaja Kallas.
While the Baltic states and several other EU members have long called for full confiscation of Russian funds, countries including Germany, Italy, and Belgium remain opposed. Belgium faces particular legal and financial risks because Euroclear, which holds the majority of the frozen assets, is based there.
As an alternative, Brussels is considering establishing a special fund modelled on the European Stability Mechanism (ESM). The fund could also be open to G7 countries such as the UK and Canada, both supporters of confiscation. Investments in higher-yield, riskier instruments could generate additional resources for Ukraine while keeping the assets under EU control.
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