Why Ukrainians think EU plans for Russian assets don’t go far enough

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Good morning. Overnight EU legislators reached a deal to ban products made with forced labour from the bloc. It still requires final approval. Today, the European Commission will present plans to boost the EU’s defence sector and drum up military investment. But my colleagues reveal that some member states are wary of handing Brussels more money and power on defence.

Below, Ukrainian activists tell me why EU plans to seize profits from Russia’s immobilised assets are falling short of Kyiv’s needs. And our Dublin correspondent previews two crucial referendums on women’s rights in Ireland.

Whose profits?

Following months of wrangling, the EU is slowly making progress on seizing windfall profits generated by Russian frozen assets blocked in Belgium.

But a Ukrainian organisation has slammed the bloc for only planning to confiscate these profits from 2024 onwards, leaving billions of euros in the hands of a private company.

Context: EU sanctions have immobilised about €191bn of sovereign Russian assets on the books of Euroclear. The Brussels-based central securities depository made €3.25bn in profit after tax since the start of the war by reinvesting cash balances from maturing securities, which belong to Russia’s central bank or other sanctioned individuals.

The EU has agreed to set aside Euroclear’s extraordinary profits and plans to confiscate them in the future for Ukraine — but only those generated after mid February, when the rules came into force.

“We are not happy that the profits of 2022 and 2023 are not included,” said Daria Kaleniuk, head of the Anti-corruption Action Centre (Antac), a Ukrainian NGO.

Euroclear is using the profits to date as a buffer to compensate for future risks, as it is already facing dozens of lawsuits in Russian courts by sanctioned individuals.

Kaleniuk questioned whether the full profits were needed as a buffer for Euroclear. “On the profits, there is legal certainty that it can be seized, all lawyers agree. So why does this money belong to Euroclear?”

Euroclear estimates that its earnings from Russian assets this year could reach similar amounts to last year. The European Commission is expected to come forward with a proposal to seize future profits in the coming weeks, according to officials.

Today, the commission will also suggest to EU countries that future profits should be used for the Ukrainian defence industry, according to a draft seen by the Financial Times.

But that would be too late, according to Antac. “The profits from 2024 onwards are not available yet, but we desperately need it now. This year will be crucial in terms of military support,” Kaleniuk said.

“We are calling for the buffer to be released now for the defence of Ukraine. The situation is dire. There is a lack of money, a lack of ammunition,” Kaleniuk said. “Did Europe calculate the risk of not acting, if Ukraine loses the war?”

Euroclear declined to comment. The commission and the Belgian government did not reply to a request for comment.

Chart du jour: Sticky services

Persistently high prices for services are encouraging policymakers at the European Central Bank to wait before cutting rates, despite overall inflation having come down.

Caring about words

Forget saying it with flowers. Irish voters can mark International Women’s Day on Friday and Mother’s Day on Sunday with constitutional changes regarding women’s role in society, writes Jude Webber.

Context: Ireland has overhauled its socially conservative image with a string of changes to its 1937 constitution, including scrapping bans on abortion and divorce, and permitting same-sex marriage.

Two referendums on Friday will address controversial articles that suggest a woman’s “life” and “duties” are in the home.

The family referendum proposes to recognise that families can be based on “durable relationships”, not just marriage. The care referendum would broaden the definition of caregivers.

But many are unhappy with the proposed wording. “Durable relationships” are not defined. The care vote proposes striking out an article recognising the value of a woman’s “life within the home”, and another that says women should not be forced to work “to the neglect of their duties in the home”. Instead, care provided within families more generally would be recognised.

Michael McDowell, a former attorney-general, says the referendums introduce unnecessary uncertainty. Some disabled rights campaigners say the proposed changes perpetuate stereotypes that people needing care are a burden. Some farmers fear that fiddling with the definition of the family will complicate inheritance.

Ivana Bacik, leader of Ireland’s Labour party who chaired a parliamentary committee that proposed more inclusive wording, says the text on offer on Friday is better than nothing, and will update the constitution’s “outdated and sexist” language. 

The government is urging voters to opt for Yes, but the outcome is uncertain: limited polling suggests many people are undecided, and the turnout will probably be low.

What to watch today

1. EU justice ministers meet in Brussels.

2. French President Emmanuel Macron visits Prague, meets Czech President Petr Pavel and Prime Minister Petr Fiala.

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