The EU’s new plan to break Russian assets stalemate

This is a last-ditch attempt to win over EU countries that are not part of NATO — such as Austria, Malta, Cyprus and Ireland — and who demanded an exemption from buying ammunition. Other vocal critics of the EU’s military strategy in Ukraine, such as Hungary and Slovakia, also support this caveat, which was first reported by POLITICO in April.

The European Commission proposed in March to use 90 percent of the proceeds from Russia’s frozen sovereign assets to buy weapons for Ukraine, while directing the rest to humanitarian aid. The plan applies only to the €192 billion being held by Euroclear, the Belgium-based securities depository.

However, the opt-out will not assuage all concerns. EU countries that are also members of the G7 — Germany, France and Italy — are the least enthusiastic about this proposal due to the legal and financial risks, said an EU diplomat who was granted anonymity to speak freely. It is feared that these capitals will not support the deal on Wednesday.

If cleared, the deal would pave the way for the EU to transfer between €2.5 billion and €3 billion by July to prop up Ukraine’s defenses against Russian aggression.

EU downsizes Euroclear’s sweetener

The latest proposal takes a slightly tougher approach to Euroclear — following complaints from across the bloc that Belgium had given the financial institution preferential treatment.

The EU halved Euroclear’s commission from 3 percent to 1.5 percent of the total profits — which is still seen as too much by some capitals, including Berlin.