Although negotiations between Russia and the US are at a very early stage, one of the ideas being proposed in Moscow is that Russia may offer to use a significant portion of the frozen reserves for Ukraine's reconstruction as part of a possible peace agreement, three sources told Reuters.
A year ago, the World Bank estimated that the reconstruction and recovery of Ukraine would cost $486 billion.
One of the agency's sources, familiar with the discussions in Moscow, reported that Russia may agree for up to two-thirds of the reserves to go towards Ukraine's reconstruction as part of a peace agreement, provided there are accountability guarantees. The rest could go to Russian-controlled territories in eastern Ukraine, which Russia now considers part of Russia, the source said.
Another agency source, close to the Kremlin but not directly involved in the discussions, stated that Russia will still demand the unfreezing of assets as part of a gradual lifting of sanctions.
After Putin sent troops into Ukraine in 2022, the US and its allies banned operations with the Russian central bank and finance ministry, blocking $300-350 billion of Russian assets held in a European securities depository. At the time of the asset freeze, the Russian central bank reported that its euro assets amounted to about $207 billion, US dollars — $67 billion, British pounds — $37 billion. Additionally, it had 36 billion Japanese yen, 19 billion Canadian dollars, 6 billion Australian dollars, and 1.8 billion Singapore dollars. The volume of assets in Swiss francs was about $1 billion. As of the beginning of last year, about 159 billion euros of these assets were managed by the Belgian clearing house Euroclear Bank.
In 2023, the G7 stated that Russian assets would remain frozen until Russia pays for the damage caused to Ukraine. Russia previously stated that plans to use these funds in Ukraine are tantamount to robbery.
Some Western officials, especially in the German government and the European Central Bank, are reluctant to simply confiscate sovereign reserves, warning that such a move could face legal challenges and undermine the euro as a reserve currency.
“Nothing about Ukraine and the EU can be decided without Ukraine and the EU,” said European Commission spokeswoman Anitta Hipper. According to her, the EU is helping Ukraine strengthen its position before negotiations, including with the help of new sanctions.
The main demands of Russia for ceasing hostilities are the withdrawal of Kyiv's troops from the Ukrainian territory claimed by Moscow and the cessation of Ukraine's pursuit to join NATO. Ukraine says that Russia must leave its territory and wants security guarantees from the West. Meanwhile, the Trump administration claims that Ukraine is setting “illusory” goals.