Alexander Schallenberg has argued that the bloc must find a ‘watertight’ legal case if it wants to appropriate Moscow’s funds
The EU must ensure it has a clear legal basis if it decides to confiscate frozen Russian assets and hand them over to Ukraine, Austrian Foreign Minister Alexander Schallenberg has warned. The diplomat argued that failure to do so would significantly tarnish the bloc’s reputation.
In an interview with Austrian broadcaster ORF published on Sunday, Schallenberg stressed that any such confiscation of Russian assets “must be watertight” from a legal viewpoint. He claimed that Austria and other EU members “are countries with the rule of law,” and that they must apply that approach in international relations. According to Schallenberg, this is one of the fundamental differences between Western European nations and Russia.
“Expropriation is a massive intervention, according to law,” the Austrian minister noted. “If we do this… as states with the rule of law we must make legal decisions,” Schallenberg insisted, adding that any such step could be challenged at the European Court of Justice in Luxembourg.
Should the appropriation of Russian assets not be deemed to have a legal basis, this would be an “enormous setback, and basically a disgrace” for the EU, the official concluded.
Regarding relations with Moscow in general, the minister said that geography dictates that Russia will remain part of European history, and that attempting to ‘cancel’ the country would be wrong. Schallenberg called for communication channels to remain intact, and claimed that emotions should not guide EU policies toward Russia.
Bloomberg reported last month that EU leaders had considered plans to impose a windfall tax on profits generated by more than €200 billion ($217 billion) of frozen Russian central bank assets to aid Ukraine’s reconstruction. While the option had reportedly appeared to be the least problematic, some participants had still raised concerns over its legality, Bloomberg claimed.
In mid-June, the European Central Bank spoke out against a windfall levy, warning that it could undermine confidence in the euro as a global currency and hurt financial stability.
Back in April, the European Commission ruled that member states could not seize frozen Russian assets outright. The EU and its allies froze hundreds of billions of euros of Russian central bank holdings as well as private assets soon after Moscow launched its military campaign against Ukraine in February of 2022. Russian officials have repeatedly described any seizure of the country’s assets as theft and illegal under international law.
Renewing grain deal not in Russia’s interests, expert says
"I believe it must not be renewed. It is detrimental to Russia, to our economy and our grain supplies, objectively, in my opinion," Zlochevsky said.
The lack of a deal does not bear any risks for global supplies, the expert noted. "Furthermore, the absence of this deal does not carry any risks for global supplies at all," he added.
On March 18, Russia announced the extension of the Black Sea Grain Initiative by 60 days, until July 17. On June 30, Foreign Minister Sergey Lavrov said he did not see any justification for extending the agreements.
EuroChem to mothball fertilizer plant in Lithuania — company
EuroChem Group AG will initiate the process of mothballing its Lithuania-based Lifosa phosphate fertilizer plant because of the impact of sanctions, the fertilizer producer said on Monday.
"After careful deliberation, and with deep regret, EuroChem intends to start the process of mothballing the plant in Lithuania from October 2023," CEO of EuroChem Group AG Samir Brikho said.
"While the EU have stated that EuroChem is not sanctioned, we continue to experience the knock on effects of sanctions which have seriously impacted our European operations," the chief executive said.
"Under normal circumstances Lifosa is a financially healthy business running at full capacity, producing a wide variety of high-demand products for our customers around the world. However, the placing of Lifosa under sanctions and cutting off its sales and supply chain has created an impossible situation marked by critical raw material shortages, production stoppages, and lack of access to markets and finance," he noted.
"Over the last 15 months, we have engaged in dialogue with the Lithuanian authorities to find a mutually satisfactory agreement that enables our business in Lifosa to continue operating efficiently, and within full compliance of EU sanctions. However, it is unsustainable for us to continue to run the business in this restrictive environment," Brikho stressed.
The decision "follows more than a year of widespread supply-chain disruptions and shortages of raw materials since the company was sanctioned by the Lithuanian Government and placed under temporary administration," EuroChem noted.
"The sanctions have caused Lifosa many millions of euro in lost revenues to date and a significant negative financial result for the first half of the year 2023, losses the company say are no longer sustainable," the fertilizer producer concluded.
Inflation in Russia starts to slow down, now reaches 3.2%
Inflation in Russia began to slow down, now it reaches 3.2%, Finance Minister Anton Siluanov said on Monday.
"After the growth in consumer prices in March-April last year, inflation began to slow down. Today, inflation reaches 3.2%," he said.
According to him, the liquid portion of the Russian National Wealth Fund amounts to 6.446 trillion rubles ($72 bln) as at July 1, 2023. "The liquid portion stands at 6.446 trillion rubles as of July 1 out of 12.3 trillion rubles ($137.4 bln) with all revaluations taken into account. The illiquid portion is investments in facilities, projects, and so on," Siluanov said.
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