EU Set to Lock Up Frozen Russian Assets12/12 06:18

   

   BRUSSELS (AP) -- The European Union is expected on Friday to lock up 
Russia's assets held in Europe until it gives up its war in Ukraine and 
compensates its neighbor for the heavy damage that it has inflicted for almost 
four years.

   The move is an important step that would allow EU leaders to work out at a 
summit next week how to use the tens of billions of euros in Russian Central 
Bank assets to underwrite a huge loan to help Ukraine meet its financial and 
military needs over the next two years.

   Hungarian Prime Minister Viktor Orbn -- Russian President Vladimir Putin's 
closest ally in Europe -- accused the European Commission, which prepared the 
decision, "of systematically raping European law."

   A total of 210 billion euros ($247 billion) in Russian assets are frozen in 
Europe. The vast majority of the funds -- around 193 billion euros ($225 
billion) at the end of September -- are held in Euroclear, a Belgian financial 
clearing house.

   The money was frozen under sanctions that the EU imposed on Russia over the 
war it launched on Feb. 24, 2022, but these sanctions must be renewed every six 
months, and all 27 member countries must approve them for that to happen.

   Hungary and Slovakia oppose providing more support to Ukraine.

   Friday's expected decision, which is based on EU treaty rules allowing the 
bloc to protect its economic interests in certain emergency situations, would 
prevent them from blocking the sanctions rollover and make it easier to use the 
assets.

   Orbn said on social media that it means that "the rule of law in the 
European Union comes to an end, and Europe's leaders are placing themselves 
above the rules."

   "The European Commission is systematically raping European law. It is doing 
this in order to continue the war in Ukraine, a war that clearly isn't 
winnable," he wrote. He said that Hungary "will do everything in its power to 
restore a lawful order."

   In a letter to European Council President Antnio Costa, who will chair the 
summit starting on Dec. 18, Slovak Prime Minister Robert Fico said that he 
would refuse to back any move that "would include covering Ukraine's military 
expenses for the coming years."

   He warned "that the use of frozen Russian assets could directly jeopardize 
U.S. peace efforts, which directly count on the use of these resources for the 
reconstruction of Ukraine."

   But the commission argues that the war has imposed heavy costs by hiking 
energy prices and stunting economic growth in the EU, which has already 
provided nearly 200 billion euros ($235 billion) in support to Ukraine.

   French Foreign Minister Jean-Nol Barrot described the expected move as "a 
major decision that will undoubtedly influence the course of the war and 
accelerate peace."

   "Because Europeans do not want to let anyone else decide for them ... we 
have decided to lock those sums (assets) for as long as necessary," Barrot said 
on France Info news broadcaster.

   The decision would also prevent the assets from being used in any way 
without European approval. A 28-point peace plan drafted by U.S. and Russian 
envoys stipulated that the EU would release the frozen assets for use by 
Ukraine, Russia and the United States. That plan was rejected by Ukraine and 
its backers in Europe.

   Belgium, where Euroclear is based, is opposed to the "reparations loan" 
plan. It says that the plan "entails consequential economic, financial and 
legal risks," and has called on other EU countries to share the risk.

   Russia's Central Bank, meanwhile, said on Friday that it has filed a lawsuit 
in Moscow against Euroclear for damages it says were caused when Moscow was 
barred from managing the assets. Euroclear declined to comment.

   In a separate statement, the Central Bank also described wider EU plans to 
use Russian assets to aid Ukraine as "illegal, contrary to international law," 
arguing that they violated "the principles of sovereign immunity of assets."