(MENAFN) The European Union (EU) is exercising prudence in responding to calls for the seizure of Russian sovereign funds, according to European Union Economy Commissioner Paolo Gentiloni in an interview with the Financial Times on Tuesday. Amid escalating tensions following the military operation in Ukraine, the United States and its allies froze approximately USD300 billion in Russian assets in February 2022. While there have been suggestions to outrightly confiscate these funds and allocate them to Ukraine, the European Union is proceeding with a gradual approach.
Commissioner Gentiloni emphasized that the European Union has taken a step-by-step approach, highlighting the decision to seize an estimated USD5 billion in interest from the frozen assets as one of the initial measures. The cautious stance is in contrast to recent proposals, such as Belgium's suggestion to create a "special purpose vehicle" utilizing the funds as collateral for potential reparations to Ukraine.
Gentiloni stressed the need for common decisions and solidarity at the G7 level, acknowledging that the issue is primarily a European concern due to the concentration of the assets within the region. The United States has been advocating for asset confiscation, particularly as its own USD60 billion funding package for Ukraine faced challenges in Congress.
However, recent developments have provided some breathing room, as Hungary withdrew its veto of the European Union 's plan to allocate EUR50 billion (USD53.7 billion) to Kiev over the next four years, responding to pressure from Brussels. This move, coupled with the decision to seize interest from the frozen assets, allows for a more measured and less rushed approach to addressing the complex issues surrounding Russian assets, as highlighted by Commissioner Gentiloni.
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