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EU does not support Belgium’s idea of using Russian assets to benefit Ukraine

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European Union states have shown little enthusiasm for a Belgian proposal to use frozen Russian assets to benefit Ukraine by issuing special debt obligations.

Source: European Pravda; Reuters

Details: Earlier, the media reported that Belgium had proposed that Ukraine’s allies should issue debt to finance Kyiv, using Russian assets as collateral.

Belgium’s idea was also discussed by G7 finance ministries as one of the options for using frozen Russian assets, but the EU has reacted coolly, Reuters writes.

“What we know is that using the assets as collateral suffers from the same legal, economic and financial concerns as a confiscation, and most legal departments across the G7 consider that,” a European official familiar with the discussions told the news agency.

He and four other people Reuters spoke to agreed that using an asset as collateral is legally equivalent to confiscation – and therefore carries similar risks.

The sources also pointed to other problems with the Belgian plan, such as who would issue the bonds and how potential investors would treat them if there were a default on the bonds.

In addition, European officials have expressed concerns that such a move could provoke a backlash against European assets in Russia and tarnish the reputation of the eurozone.

Last month, EU foreign ministers reached a political agreement on a plan to use Russian assets to support Ukraine.

Read more on the topic: Challenges of confiscation: What will help Ukraine achieve transfer of Russian assets

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