Why EU efforts to use Russia’s frozen assets are progressing at a snail’s pace

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Good morning. Gabriel Attal was yesterday appointed as the youngest-ever prime minister of France. He’s 34, which means he wasn’t even born at the time of Joe Biden’s first campaign to become US president. Read our full profile here.

Today, Laura explains why Belgium’s newfound responsibilities as the holder of the EU’s rotating presidency could complicate the issue of tapping immobilised Russian assets to help Ukraine. And our environment correspondent puts on her wellies to assess anti-EU feelings on the farm.

Deep freeze

To seize, or not to seize Russia’s frozen assets?

While the G7 group of nations considers how to use some €260bn belonging to Russia’s central bank for the benefit of Ukraine, European countries are taking baby steps towards using the assets’ unforeseen spoils, writes Laura Dubois.

Context: Officials are working on how to transfer to Kyiv the Russian sovereign assets immobilised by western sanctions. But EU countries fear adverse effects, and are instead working on seizing only extraordinary profits that financial institutions are making by holding the assets.

Today, representatives of member states meet to discuss a recent proposal that would pave the way for this latter option, stopping short of touching the actual assets.

Countries like Germany, France and Belgium — where the bulk of the €210bn frozen in Europe is held — have been wary of moving from just ringfencing the profits being made at the financial institutions, to actually confiscating them.

“I hear a lot of prudence on the topic of what you would call the second tranche [of seizing the profits],” Belgian Prime Minister Alexander De Croo told reporters this week.

“Let’s listen to the experts on that topic, in the sense that there is the obligation of repairing the damage [to Ukraine] at some point, but there is of course a need for a legal framework.”

Belgium has just assumed the rotating six-month presidency of the European Council and is leading the talks. Some officials, however, worry that the country, where €191bn belonging to Russia is stuck, might not be the best middleman.

“Belgium has promised to proceed with the work but one can sense they are not eager to do that,” one EU diplomat said.

De Croo suggested Belgium would not veto using the assets if the other countries agreed. “Blocking is really the last resort and I don’t think we need to do that. We can convince others.”

The European Central Bank has warned that touching the profits made by Euroclear, the central securities depository holding the assets in Belgium, could destabilise the financial system. Seizing the assets themselves would be even more risky.

Yet while European countries grapple with technical details around the profits, that is exactly what the G7 — led by the US — is discussing.

“The hope is that this will at some point increase the realisation among the member states that this is only one small piece of the puzzle,” one EU official said.

Chart du jour: It’s working

Unemployment in the eurozone is at a record low, with the biggest recent improvement seen in Italy. Such a development would have been seen as unthinkable a decade ago, when millions of people lost their jobs in the region’s debt crisis.

On the hoof

Maroš Šefčovič, the EU’s Green Deal chief, might hope that the birth of a calf during his visit to a Belgian farm yesterday is a good sign for the fraught relations between governments and farmers, writes Alice Hancock.

Context: The launch of the EU’s Green Deal climate package in 2019 and a new Common Agricultural Policy introduced last year have vastly increased bureaucracy for farmers, who are taking to the streets in protest.

The backlash has fuelled anti-EU sentiment and spread from riots in the Netherlands over nitrogen emissions that started in 2022 to tractor roadblocks over diesel subsidy cuts in Germany this week.

Picking his way through the cattle sheds, Šefčovič said Brussels needed “much more of an interaction . . . with the players on the ground”, and admitted that the EU had “overdone” some obligations.

European Commission President Ursula von der Leyen last year promised to hold “strategic dialogues” with farmers, but these have yet to materialise.

Šefčovič said they would happen later this month or next, and would involve everyone from young farmers to supermarkets to banks. “We would like to focus on very basic questions,” he said.

Chief among those is money: Peter Meedendorp, president of CEJA, Europe’s young farmers association, said he had spent 40 hours filling in forms to receive agricultural subsidies from the EU this year, only to discover that he would receive less money because too many people had applied for it.

“There’s no place to go as a farmer. You just need to deal with it,” Meedendorp said.

What to watch today

1. Meeting of the college of European commissioners.

2. Nato secretary-general Jens Stoltenberg convenes a meeting of the Nato-Ukraine Council.

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