Euroclear
Euroclear’s headquarters in Brussels. — © Kristof Vadino
The European member states have reached an agreement in principle on the use of the billions in proceeds from the blocked Russian assets.
The Belgian presidency of the European Union reported the agreement via an email https://twitter.com/EU2024BE/status/1788202528607277533 on X. It is the EU ambassadors of the member states who have agreed. “The money will be used to fund Ukraine’s recovery, as well as to pay for military defense efforts in the face of Russian aggression,” the statement said.
The intention is for the proceeds to be largely transferred to the European Peace Facility, a mechanism that reimburses arms purchases by member states on behalf of Ukraine. About 10 percent of the proceeds are intended for the Ukraine facility, a new instrument with which the European Union wants to finance the Ukrainian economy and reconstruction.
Months of bickering
There has been bickering for months about the billions in revenue from Russian assets. There are many pitfalls, both legal and economic. The agreement must still be formally accepted by the member states. The Russian assets themselves will not be affected, but as long as they are blocked, the proceeds can be spent, the EU reasons.
The Russian assets blocked by the G7 countries total around 280 billion euros. Most of this is housed by the Brussels company Euroclear. Last year, Euroclear was able to make a profit of 4.3 billion euros on Russian assets. Another 1.5 billion euros were added in the past three months. The income stream is gradually growing as the proceeds themselves are reinvested, Euroclear explained in its quarterly results.
Belgian concessions
According to the website Politico Belgium had to make a concession to reach the agreement. Our country collected a quarter of the revenue in the form of corporate tax, because Euroclear books the return as profit. The promise was to spend that money on Ukraine, but the government also used it to pay for the reception of refugees, for example. The other Member States objected to this, because they have to pay those costs out of their own pockets.
Belgium would now have agreed to also transfer the tax revenues in full to Ukraine itself. Last year, Euroclear paid more than 1 billion euros in taxes on revenues, the results show. In the first quarter of this year that was already 391 million. The costs that Euroclear may charge for collecting the proceeds are set at 0.3 percent. Here too, Belgium had to make a concession. Initially, our country had aimed for 1 percent. The Belgian government is a shareholder in Euroclear and owns 13 percent of the company.
