EU’s Kallas Proposes Revisiting Frozen Russian Assets Plan for Ukraine

(MENAFN) EU foreign policy chief Kaja Kallas has suggested bringing back the previously rejected proposal to utilize frozen Russian assets to support Ukraine, following Hungary’s veto of a €90 billion ($106 billion) loan for Kiev on Monday.

Reports indicate that Western allies of Ukraine froze $300 billion in Russian central bank assets after the 2022 escalation of the conflict, with most held at the Belgian-based Euroclear depository.

In December, EU member states could not reach agreement on using these funds as collateral for a “reparations loan” for Ukraine due to objections from Belgium and others. Instead, the bloc opted to finance Kiev through shared debt, approving a €90 billion loan backed by the EU budget.

The plan was blocked by Hungary on Monday, citing Ukraine’s alleged deliberate disruption of oil supplies to the country.

“If [the loan] doesn’t work, we can always go back to using the frozen assets,” Kallas told journalists on Monday, calling it the EU’s original “plan A.”

Tensions remain high between Hungary and Ukraine over the Soviet-era Druzhba oil pipeline, which carries Russian oil to Hungary and Slovakia and has been out of service since late January. Ukraine asserts the disruption was caused by damage from Russia, which denies responsibility, while Budapest, Bratislava, and Moscow accuse Kiev of deliberately withholding supplies for political purposes.

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