The EU is arguing over the mechanism of using the Russian Federation’s frozen assets for Ukraine’s reconstruction of Ukraine.

Differences of opinion arose between the European Commission and the European Central Bank regarding the use of profits from the investment of more than €200B in frozen assets belonging to the Russian central bank.

Bloomberg sources say the ECB is warning that the proposed measures could threaten the eurozone’s financial stability and the euro’s liquidity. Instead, the European Commission rejected the ECB’s arguments, saying that any risk had already arisen when Russian assets were frozen in February 2022 following Russia’s invasion of Ukraine. So far, none of these fears have materialized.

Representatives from the European Commission also emphasized that the proposal to send a portion of the profits to Ukraine does not affect the assets themselves or any requirements of the Russian central bank, nor does it affect the role of the EU in the custody of securities. G7 and EU finance ministers will discuss the issue on the sidelines of the G20 meeting on July 16.