EU, "secret weapon" for peace talks in Ukraine? - Over 200 billion euros in Russian funds could shake the balance at the table
US President Donald Trump is acting as if he has everything under control to end the war in Ukraine. But Brussels has an ace up its sleeve that it has yet to use: a secret weapon worth 200 billion euros.
After being left out of discussions with the US and Russia on February 18 on peace negotiations, European governments may decide to take back Russian sovereign assets that were frozen after Moscow began its invasion of Ukraine three years ago.
Fortunately for the bloc, the bulk of these funds, some 200 billion euros, are held at the Brussels-based financial institution Euroclear and are earning interest. The US, on the other hand, has only $5 billion. Seizing these assets is a drastic option that would almost certainly guarantee Europe a significant seat at the table.
But EU governments remain divided on their use, with some thinking it would be a show of force for Trump, while others think it would backfire.
Negotiating tool
Those who want to hit Russia argue that handing over the money to Kiev would allow the war-torn country to gain an advantage on the battlefield and resist Trump's demands to end the war.
"With frozen Russian assets we can replace American support, if the US decides to stop supporting Ukraine," said official Estonian sources, who have the support of Denmark, Sweden, Lithuania and Latvia. The Baltic and Nordic countries, Russia's neighbors, believe that the money should be handed over to Ukraine immediately. This position is supported by Poland and the Czech Republic.
But the opposing camp in Europe is made up of major powers such as France, Germany, Italy, Spain and European Commission President Ursula von der Leyen, who fear that by confiscating the funds the EU would scare away international investors and give up its biggest advantage in peace talks. “If we were to give Ukraine the assets, we could no longer use them as a bargaining chip,” said one EU diplomat.
French President Emmanuel Macron, during a meeting with Trump in the Oval Office, insisted that Western allies could legally use the proceeds from the war assets, but insisted that it would be illegal to take the reserves directly. He noted, however, that freezing them offered an important opportunity. “It is part of the negotiations at the end of the war,” he stressed.
Frozen assets as a "counterweight"
The "opponents" camp argues that using the funds would undermine the EU's influence in peace talks with Russia.
After meeting Russian Foreign Minister Sergey Lavrov in Riyadh last week, US Secretary of State Marco Rubio said the EU would have to be involved in peace talks "at some point" because of the sanctions it has imposed on Russia. European countries are aware that billions of euros in frozen Russian assets give them additional leverage over the Kremlin.
"If Russia really wants to get the money back, then it must give something in return. The continued holding of the assets serves as a financial and diplomatic counterweight, ensuring that Russia has a clear motive to negotiate a solution and compensate Ukraine," sources within the bloc said.
The 27 EU leaders have also decided in law that the assets will remain frozen until Russia agrees to pay Ukraine post-war reparations.
Countries are looking at 200 billion euros as a means to cover the costs of rebuilding Ukraine, estimated at 486 billion dollars by the World Bank. Russia has accepted the idea, as long as the funding also covers the reconstruction of Ukrainian regions under Moscow's control.
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