Germany pushes back against EU plan to raid frozen Russian assets

Germany has voiced objections against Brussels’ plans to raid frozen Russian central bank assets for Ukraine’s reconstruction, warning that a hasty move could stir up legal or financial risks. 

The European Commission is working on a plan that could raise billions of euros by requiring financial institutions holding immobilised Russian assets to hand over some of the profits generated and use them in the rebuilding of Ukraine.

But following concerns flagged by the European Central Bank, Berlin and other capitals have called for further reflection over the ideas.

A foreign ministry official said Moscow “will have to pay for the damage it has caused in Ukraine” and insisted Germany was doing “everything it legally can” to locate and freeze the assets of sanctions-hit Russian individuals and companies.

But he said the idea of using Russian funds for Ukraine’s reconstruction raised “complex financial and legal questions”. 

One official said Marco Buschmann, Germany’s justice minister, had studied the EU proposals for harvesting the Russian central bank assets and concluded they were legally unworkable. 

Ever since the EU and its allies immobilised hundreds of billions of euros of Russian central bank assets after Moscow’s full-scale invasion of Ukraine, officials have been debating ways of putting some of that money to work rebuilding the country. 

EU officials have backed away from the idea of confiscating the assets outright, and are instead looking for ways to harvest some of the proceeds for Kyiv.

One option is for securities depositories to be required to make a windfall contribution from the profits generated when they reinvest the proceeds of immobilised Russian assets. 

Source: Financial Times