Germany fights plan to use Russian wealth to rebuild Ukraine

Officials in Chancellor Olaf Scholz's government say it is doing «everything it can legally» to hold Moscow accountable Photo: Odd ANDERSEN/AFP

Germany leads opposition to European Union plans to use cash from frozen Russian assets to pay for Ukraine's reconstruction.

Berlin officials are reportedly part of a group that raised concerns after Brussels prepared proposals to raise billions of euros from Russian assets confiscated under the bloc's sanctions regime.

The plan would require financial institutions that now own the assets of the Russian central bank, have passed on the profits generated by those assets so that the money can be channeled into Ukraine's efforts to rebuild its cities.

According to Ukrainian officials, this could attract up to 3 billion euros (2.6 billion pounds) per year.

But senior German officials warned that it would «open a can of worms.» , exposing the EU to huge legal risks, according to the Financial Times.

They insisted that Moscow would be held accountable in other ways, and that Chancellor Olaf Scholz's government was doing «everything it could legally» in that direction . .

One of Berlin's main fears is said to be that similar raids on Russian government facilities would set a precedent that could expose Germany to similar actions in the future.

For example, it could open the door for use by Poland. Similar methods require Germany to make amends for the damage caused to the country during World War II, according to the FT.

2202 Military aid to Ukraine

There are other countries said to be who are also concerned about the proposals, but they were not named.
At a meeting of diplomats and the European Commission last Wednesday, many countries are said to have called for caution.

Ukrainian officials are pushing for the EU to somehow use the frozen Russian assets. Another idea would be to use them as collateral for Ukraine to obtain loans.

One EU diplomat told the FT: «The challenge is to try to decide what is legally sound and justifiable.»

< p> The precedent really exists somewhere in the West. Last year, Canada began seizing assets belonging to Russians under sanctions.

In December, Canadian Foreign Minister Mélanie Joly said her country would seek a final seizure of $26m (£20m) from Granite Capital Holdings, a company owned by sanctioned Russian oligarch Roman Abramovich.

“If confiscated, the proceeds could be used to rebuild Ukraine and compensate victims of the Putin regime’s illegal and unjustified invasion. ,» the statement said.

Canada became the first G7 country to implement such measures.