European Union Unfreezes Strategy: Russian Assets on Indefinite Hold to Support Ukraine

The European Union plans an indefinite freeze on Russian central bank assets to support Ukraine against Moscow. This move closes a risk of financial rollback due to some EU countries' softer stance on Russia. An EU summit will address remaining legal challenges and finalize funding agreements.

The European Union is poised to indefinitely freeze Russian central bank assets in Europe, amounting to 210 billion euros. This strategic shift removes a significant hurdle in utilizing these funds to assist Ukraine amidst ongoing conflicts with Moscow. The decision is expected to gain approval through a qualified majority vote by the end of the day.

Previously, asset freezes required unanimous agreement and were subject to renewal every six months. The perpetual freeze aims to mitigate risks posed by countries like Hungary and Slovakia, which maintain relatively favorable ties with Russia. The EU's strategy also aims to greenlight using these funds to extend a sizable loan to Ukraine for 2026-2027, contingent on future Russian reparations.

Diplomatic negotiations are underway ahead of an EU summit scheduled for December 18, where leaders will iron out unresolved issues. Germany has committed substantial guarantees, yet the decision remains contentious. Hungary has voiced strong opposition, warning of potential harm to the Union, while Russia challenges legal grounds in a Moscow court.

(With inputs from agencies.)