EU Commissioner for the Economy, Paolo Gentiloni, told reporters in Luxembourg that the European Union is currently discussing the possibility of changing the current mechanism for extending sanctions against Russia every six months. This would allow for the long-term repayment of a €50 billion loan to Ukraine from the income generated by Russian assets. This would be possible even if the sanctions were lifted.
“We are further considering the issue of changing the mechanism, which currently provides for a review every six months. For this, as we know, unanimity must be achieved,” the commissioner said before the start of a meeting of EU finance ministers.
In addition, he said that options are being developed in the scenario that it is not possible to obtain majority support for the adjustment of the mechanism that enforces the extension of sanctions.
“We also recognize that we have the opportunity to prepare conditions for the repayment of the loan without using this regime. We will certainly work on this, but there is no doubt that we can imagine our participation in this loan even if we cannot achieve a unanimous decision,” the commissioner added.
The EU Council adopted Josep Borrell’s proposal on May 21. It entails allocating 90% of the income generated by frozen Russian assets in the EU to the EU budget for military assistance to Ukraine. The remaining 10% will be allocated to Ukraine’s recovery programs.
In addition, at the June summit in Italy, the G7 nations pledged to provide Ukraine with loans totaling approximately $50 billion by the end of the year, which will be repaid from the income generated by Russian assets.
In July of this year, European Commission President Ursula von der Leyen pledged to send the initial funds from the income of frozen Russian assets to Kyiv.
The EU and G7 countries froze nearly half of Russia’s foreign exchange reserves, which totaled approximately €300 billion after Russia launched its special operation in Ukraine. The accounts of Belgium’s Euroclear, one of the world’s largest settlement and clearance systems, are the primary location of approximately €200 billion in the EU.
