Wider Europe

Welcome to Wider Europe, RFE/RL's newsletter focusing on the key issues concerning the European Union, NATO, and other institutions and their relationships with the Western Balkans and Europe's Eastern neighborhoods. To subscribe, click here.

I'm RFE/RL Europe Editor Rikard Jozwiak, and this week I'm drilling down on two major issues: the upcoming European Political Community summit in Moldova and the difficulties facing the EU in seizing or using Russian frozen assets.

Brief #1: What To Expect When European Leaders Descend On Moldova This Week

What You Need To Know: On June 1, the leaders of the EU's 27 member states and their counterparts from 20 other European countries gather at the private Mimi Castle and winery some 30 kilometers outside the Moldovan capital, Chisinau, for the second summit of the European Political Community (EPC). The EPC, a brainchild of French President Emmanuel Macron, was launched last year following Russia's invasion of Ukraine as an intergovernmental forum for political discussions on the future of Europe.

At its inaugural summit in Prague in October 2022, Macron referred to the meeting as "an opportunity to build a strategic intimacy in Europe." He was also quick to dismiss the notion that it was some sort of substitute for EU membership, calming the nerves of leaders in the Western Balkans and the EU's Eastern neighborhood.

Still, a more impertinent description of the whole event is "yet another European talking shop," not too dissimilar from, say, the Council of Europe. So, don’t expect the EPC to morph into an organization with a budget, secretariat, flag, or anthem.

Deep Background: Despite being short on outcomes so far, feedback from leaders after the Prague meeting suggested they liked the idea of a forum that provided a "looser setting" where they could chitchat and not be bound by the kind of structures and strict speaking times that are imposed by other, more formal political organizations.

The Chisinau meeting is scheduled to last a little over five hours, with a short opening ceremony followed by four roundtables dealing with topics such as energy, security, connectivity, and mobility. After a working lunch, the biggest chunk of the agenda is meant for various bilateral meetings -- possibly the most interesting aspect of the day, even though the intimate setting, with few diplomats present, will make it difficult for media to tease out whether any breakthroughs or breakdowns occurred.

There will also be a family photo, which might be the most interesting aspect for posterity. Three European microstates -- Andorra, Monaco, and San Marino -- have joined the EPC since the Prague meeting, so the only European countries without a representative in Chisinau, apart from the Vatican, are Belarus and Russia. That is telling.

And it sure looks like the EPC is here for the foreseeable future. A summit is already planned for the Spanish city of Granada in early October, and then another for the United Kingdom in the first half of 2024, with the hosts rotating every six months between EU and non-EU countries.

Drilling Down

• Perhaps the most interesting meeting could be on the summit's sidelines between Armenian Prime Minister Nikol Pashinian and Azerbaijani President Ilham Aliyev. They met in Brussels in May under the auspices of European Council President Charles Michel in search of a comprehensive peace agreement between Yerevan and Baku over the breakaway region of Nagorno-Karabakh. While the meeting lasted four hours, there were no specific achievements apart from the understanding that they should meet as often as necessary.
• The same trio is likely to be flanked by Macron and German Chancellor Olaf Scholz in Chisinau in what can only be interpreted as a clear European push to play a bigger role in settlement efforts in which Moscow has so far seemingly called many of the shots. Because Paris is often accused of being too close to Yerevan, there has been a conscious push by Brussels to include Berlin in order to ensure more balance in the talks. Senior EU officials speaking on the condition of anonymity continue to stress that the added advantage of Brussels becoming more engaged on this issue is that "the EU has no hidden agenda here" and is willing to grant time and a platform to facilitate talks for as long as it takes.
• The expected Aliyev-Pashinian meeting comes just a week after Russian President Vladimir Putin hosted them in Moscow -- a gathering that concluded with the two leaders verbally sparring in front of the assembled media.
• But don't expect a breakthrough in Chisinau, as more meetings are scheduled in the next few months: in Brussels again in July with just Michel; and then possibly at the next EPC summit in Granada. But gestures related to the Karabakh conflict, such as the release of detainees, demining initiatives, or the unblocking of transport links could be in the cards. There could also be a larger role for the EU monitoring mission in Armenia that was set up earlier this year with the aim of contributing to stability at the border between Armenia and Azerbaijan. The Europeans will also look to get some sort of assurances from Baku regarding the rights and security of ethnic Armenians living in Nagorno-Karabakh. For months, Azerbaijan has been blockading a key road that connects Yerevan to Nagorno-Karabakh.
• On other matters, are there likely to be any concrete deliverables at the summit? Don't rule out something more tangible on, for example, the strengthening of Solidarity Lanes with Ukraine, a commitment on reducing or eliminating roaming costs, or the possibility of increasing exchanges of diplomats and civil servants among countries.
• A discussion paper written ahead of a security roundtable at the summit, which will be co-chaired by Poland and the United Kingdom, includes a focus on boosting cybersecurity. The text, seen by RFE/RL, notes that "Russian aggression against Ukraine is taking place in cyberspace in a form of incidents and malicious cyberactivities conducted by state-sponsored groups as well as by cybercriminals." It also suggests that more should be done to boost resilience to cyberattacks in countries neighboring Russia and in the Western Balkans.
• The document also talks of more financial support to the International Atomic Energy Agency (IAEA) in order to safeguard the Ukrainian nuclear power plant at Zaporizhzhya and the need for governments and civil society "to identify societal weaknesses which are targeted to facilitate information operations by malign actors, and which polarize and destabilize communities, e.g. ethnic minorities or marginalized communities, migrants, gender/sexual issues, and political/democratic processes and participation."
• The summit will doubtless shine a spotlight on Moldova and its president, Maia Sandu, in what is the biggest political gathering in the country's history. In its run-up, the EU has already agreed to set up a civilian mission there to counter hybrid threats as well as to impose sanctions on two Moldovans accused of undermining the territorial integrity of Ukraine, and five more, including oligarchs Vladimir Plahotniuc and Ilan Shor, for allegedly destabilizing Moldova.
• Beyond Sandu's big moment, there will be other leaders vying for attention. If Ukrainian President Volodymyr Zelenskiy shows up (he was absent at the Prague summit), he is likely to dominate the headlines. Meanwhile, there was no indication yet of whether Turkish President Recep Tayyip Erdogan will be ready to travel so soon after securing another five-year term in a May 28 presidential runoff.

Brief #2: The Long Road To Seizing Frozen Russian Assets

What You Need To Know: One widely discussed aspect of the war in Ukraine is how to finance the reconstruction of the country once the fighting ends. It is estimated by both the United Nations and the European Union that Kyiv needs over $400 billion in the next decade to rebuild its economy, a figure that will rise as the war grinds on. While Western partners are almost certain to provide economic aid for the foreseeable future via loans, grants, and investment in infrastructure, there is a growing sense that Russia must foot some of the bill.

In the final statement from the G7 summit in Hiroshima on May 19-21, the leaders of the seven leading Western economies concluded that "we will continue to take measures available within our domestic frameworks to find, restrain, freeze, seize, and, where appropriate, confiscate or forfeit the assets of those individuals and entities that have been sanctioned in connection with Russia's aggression."

The leaders added that "we reaffirm that, consistent with our respective legal systems, Russia's sovereign assets in our jurisdictions will remain immobilized until Russia pays for the damage it has caused to Ukraine."

The big question is how likely this might be achieved.

There are several avenues to using frozen Russian cash for the reconstruction, but all of them are complicated. To keep such assets in the West frozen until Russian repayment, as the G7 statement alluded to, is a long game. It also risks backfiring if governments, notably within the EU, were to stray from the unanimity that is required every six months to roll over sanctions on Russia.

The question then becomes whether it's possible to use some of the frozen wealth right away, either by confiscating assets held by individuals who have been targeted by the EU or by actively investing some of the Russian state reserves that EU member states are holding, many in the form of sovereign bonds.

Deep Background: In the EU, it is the European Commission that oversees actions regarding frozen Russian assets within the bloc. Already in March 2022, it created a Freeze And Seize Task Force tasked mainly with ensuring that all member states implement the bloc's (by now 10) packages of Russia sanctions but also increasingly to explore the legal options on the use of seized Russian assets.

In November 2022 and in March, the European Commission sent out discussion papers to member states detailing the options. Seen by RFE/RL, the papers paint a rather pessimistic picture of what is legally possible and how much Russian money the EU can realistically channel for future Ukrainian rebuilding.

The EU has so far frozen an estimated 20 billion euros ($21.4 billion) worth of assets belonging to the 1,500-plus people so far sanctioned for undermining Ukraine's territorial integrity. But the chances are small that this money can be used in any way. EU legislation stipulates that the freezing of assets alone cannot be considered a first step toward confiscation. It is considered private property and, as such, requires compensation in the event of deprivation.

Drilling Down

• One of the European Commission papers on the confiscation issue notes that previous rulings by the European Court of Justice (ECJ) suggest that sanctions like asset freezes are "of temporary and nonpunitive nature." In other words, by that reading, it's clearly a restriction but cannot be seen as a criminal punishment. It simply concludes that "from both legal and sanctions policy perspectives, it is important to preserve the temporary and noncriminal nature of sanctions to avoid raising the procedural and evidentiary thresholds required for the adoption of sanctions in the first place."
• There is an argument that the only way money can be confiscated is if the individual possessing the frozen assets is convicted of a criminal offense. This is a long and arduous process but something that the EU and its member states are looking into. The European Commission has already asked Eurojust and Europol, the EU's two agencies for criminal justice and law enforcement cooperation, to cross-check the list of sanctioned individuals against their databases; they identified criminal links relating to 71 individuals and three sanctioned companies.
• Another possibility is to legally consider some Russian entities such as companies or organizations criminal or terrorist organizations and therefore regard individuals as criminally liable for their association. That could facilitate confiscation, but in order for that to happen, national or EU laws must be rewritten to include such a possibility. Consensus among the 27 EU member states is needed for that and, so far, that has not been possible.
• The most likely option right now might be the "active management" of frozen Russian state assets belonging to the Russian Central Bank and affiliated entities. It is estimated that some $300 billion is frozen worldwide, with up to two-thirds of that in the EU.
• But even if all the legal hurdles are cleared, not all the assets would be available. Firstly, under international law, rules on state immunity would have to be assessed. That would likely cover Russian Central Bank assets that are necessary for sovereign functions like monetary policy, although it is unclear if international immunity would extend to assets used for commercial purposes.
• What the EU is therefore examining is potentially selling Russian sovereign bonds on the market and handing over the proceeds to Ukraine. Legal changes would be required, but it's unclear whether it would be worth it. The European Commission calculated that annual revenues of around 2.6 percent could be generated by selling short-term bonds. That could provide several billion dollars to Ukraine, but no more.
• Discussions have been held among representatives of various EU member states, but there appears to be some reluctance on their part. The EU doesn't want to go it alone; it would prefer that the United States do the same in order to alleviate fears among other central banks around the world that their dollar or euro reserves in the West are not safe from confiscation.

Looking Ahead

On May 29, the annual Globsec Bratislava forum kicks off in the Slovak capital. It is arguably the biggest think-tank event in Central and Eastern Europe, with leaders including French President Macron debating the latest developments in Europe and beyond for a full three days. I will be there to moderate panels on the future of both EU defense policy and the European neighborhood. Feel free to come and say hello or catch up over a coffee in Bratislava. I'll be writing about the forum in the next edition of the Wider Europe newsletter on June 5.

That's all for this week. Feel free to reach out to me on any of these issues on Twitter @RikardJozwiak or on e-mail at jozwiakr@rferl.org.

Until next time,

Rikard Jozwiak

If you enjoyed this briefing and don't want to miss the next edition, subscribe here.

Welcome to Wider Europe, RFE/RL's newsletter focusing on the key issues concerning the European Union, NATO, and other institutions and their relationships with the Western Balkans and Europe's Eastern neighborhoods.

I'm RFE/RL Europe Editor Rikard Jozwiak, and this week I'm drilling down on two major issues: the European Union's latest sanctions package targeting Moscow and two damning OSCE reports on Belarus and Russia.

Brief #1: What's In The EU's New Russia Sanctions Package?

What You Need To Know: EU ambassadors met in Brussels on May 10 and May 12 to formally review the European Commission's latest proposal on new sanctions targeting Russia. While it is unclear exactly how long it will take for the member states to agree, the working assumption is that the measures -- the 11th since the full-scale invasion of Ukraine in February 2022 -- will be adopted in the latter half of May. By EU standards, that would be pretty fast.

There are two reasons for the likely quick turnaround. First, the very same ambassadors have already been briefed by the European Commission about the content of the sanctions package in so-called "confessionals" since late April. There will be no surprises, and officials from EU member states are already familiar with the suggestions.

The second reason it's likely that the sanctions will be waved through with relative ease is that, ultimately, they are weak. In many respects, they follow the same pattern as the last five packages on Russia agreed by Brussels since last summer. They largely plug gaps and tighten screws, clarifying already-agreed provisions, and only introducing measures that won't damage the Russian economy in any significant ways.

The EU is not going after Russian gas here, nor its vast nuclear industry, including the state-owned behemoth Rosatom. Russia's lucrative diamond trade with the EU will also be left alone, and the bloc can still export goods such as lasers, cloud services, and insure Russian agricultural products.

Deep Background: One of the reasons why Brussels doesn't pursue more weighty energy sanctions is that Hungary and a few other Central and Eastern European countries, such as Bulgaria and Slovakia, have signaled that they aren't ready to agree on such moves. This is a position that will probably remain unchanged as long as energy prices remain high and risk spiking again in fall and winter of this year.

That said, in the new proposal, there are actually provisions that target Russian energy and could be approved by Budapest and other naysayers, as they are narrow and leave most countries untouched.

The new proposal states that the temporary derogation granted to Germany and Poland for the supply of crude oil from Russia through the northern section of the Druzhba oil pipeline should end. Berlin and Warsaw have said that this is acceptable, even though the former questioned the wisdom of the move as Kazakh oil, which is sometimes mixed with Russian oil, would still be allowed to flow through the pipeline.

The most significant new measure being proposed in the latest package is that Brussels is proposing to go after third countries that are knowingly circumventing EU sanctions. This is an attempt by the EU to implement so-called "secondary sanctions," which the United States has been using to great effect globally for some time already.

Drilling Down

• There are no third countries currently in the EU's crosshairs, but the bloc's trade with countries in Central Asia and the South Caucasus has skyrocketed since sanctions hit Moscow, with evidence suggesting that goods are making their way to Russia through them. The question, however, is how much Brussels -- if at all -- will ever use this proposed tool against third countries. In the initial discussions among EU ambassadors, both Germany and Italy cautioned that such a move could push countries closer to Moscow.
• In the draft sanctions proposal, seen by RFE/RL, there are certain steps that Brussels should take before doling out any punishments. The text notes that "before including a third country on the list of countries concerned by this measure, the [European] Union should inform and seek the views of the government of that country on the basis of the preliminary findings of the technical analysis and its intended remedial action." In EU speak, that means the bloc will take a gentle approach against third country offenders, at least at first.
• Perhaps the most controversial aspect of the proposal is the possible sanctioning of eight Chinese military companies that the bloc considers to have helped the Kremlin's war machine. It would be the first time the EU would target Chinese firms in the context of the Ukrainian war, and Beijing has already reacted furiously to the news. In the end, it could still be a bridge too far for some EU member states, with many of them very wary of antagonizing China.
• Other measures included in the latest sanctions proposal are: a prohibition on selling intellectual property rights to Russia; and RT Balkans will have its broadcasting license in the EU suspended, following a host of other RT channels meeting the same fate; trucks registered in Russia that transport goods by road in the EU will be banned from doing so; and the same goes for the import of steel products from third countries, if the shipments contain components from Russia.
• As always, there will be additional people and entities subjected to EU asset freezes and visa bans. The latest package includes 72 people and 29 companies -- mostly politicians the bloc deems to have been involved in the deportation of Ukrainian children, military officials, and then journalists and media companies that are accused of spreading propaganda.
• If adopted, a grand total of 1,571 people and 241 companies will be sanctioned by the EU. However, officials familiar with the negotiations but who aren't authorized to speak on the record noted that Hungary has expressed reservations about three of the 72 new people listed for sanctioning and will aim to have them removed before it can sign off on the package.

Brief #2: In The OSCE, Russia And Belarus Have Never Been So Unpopular

What You Need To Know: The Organization for Security and Cooperation in Europe (OSCE) is currently the only relevant political organization in Europe in which both Belarus and Russia remain members. While there is no real momentum to kick out the pair from the Vienna-based club, a considerable majority of the 57 member states have turned increasingly hostile toward the two countries. This has manifested itself in the invocation of the organization's so-called Moscow Mechanism twice this spring, named after it was established in the Russian capital back in 1991.

The mechanism allows the OSCE to establish an ad hoc mission of independent experts to investigate a particular question or problem, often related to human rights abuses in the territory of the OSCE, and then file a detailed report of the findings. While the reports with its recommendations are nonbinding, they are considered relevant by the wider international political community and tend to be widely cited both in political debates and referred to in international tribunals.

Under the mechanism, an OSCE member state can request that a mission is created to investigate something on its own territory, but the more common invocation is when at least 10 OSCE members request that the Moscow Mechanism should be triggered to allow for a mission in a fellow member state.

Since the mechanism was established in 1991, it has been used sparingly -- only 14 times. However, since the full-scale invasion of Ukraine 15 months ago, it has been invoked four times -- including two recent investigations and reports, one looking at the deportation of Ukrainian children to Russia and the second looking at the situation in Belarus since November 2020.

Deep Background: The OSCE report looking at the deportation of Ukrainian children was presented in Vienna on May 4 after a record 45 OSCE member states agreed to invoke the mechanism. This came after the International Criminal Court (ICC) in March announced that it had issued arrest warrants for Russian President Vladimir Putin and the Russian Commissioner for Children Rights Maria Lvova-Belova for unlawfully transporting Ukrainian children to Russia and Kremlin-controlled territories in Ukraine -- actions that the court believes could constitute war crimes.

The OSCE report goes even further in its allegations by concluding that the "practice of the forcible transfer and/or deportation of Ukrainian children to the temporarily occupied territories and to the territory of the Russian Federation may amount to a crime against humanity."

The report also notes that the mission "has not been able to ascertain the exact number of children thus deported, [although] it is clear that these numbers are measured in several thousands." It also notes that "except for few instances when the transportation of children could be justified due to imminent threat to life owing to ongoing armed conflict, the Mission has been able to establish with certainty that by and large the deportation of children cannot be qualified as voluntary" -- a claim that the Kremlin has been repeating constantly.

Drilling Down

• When discussed during the OSCE Permanent Council session in Vienna on May 4, the Russian delegation dismissed the report, noting that it presented information from "dubious sources," drew "unpleasant conclusions," and relied on "misinformation." A Russian delegate at the meeting also added that the Moscow Mechanism "has long outlived its usefulness and does not respond [to] modern realities."
• Just as Russia refused to cooperate with the rapporteurs of the report on the forced transportation of Ukrainian children, Minsk dismissed any call for assistance on the report about the human rights situation in the country. In fact, the rapporteur was not welcomed in the country and had to settle for interviewing people in Warsaw and Vilnius.
• The Belarus report focuses on the 2022 legislative and constitutional reforms, which, according to the document, means that "the Belarusian government now has a full arsenal of legislation designed to hinder any form of opposition," with the paper referring to new criminal and administrative offenses, increased liability for vaguely defined acts, extension of the death penalty, restricted access to political rights to Belarusians in exile, and limited freedom of assembly and association.
• All this put together, according to the rapporteur, could be described as "politically motivated repression," with one of the main results being a high number of political prisoners in the country. The text states that, as of April 18, there are at least 1,486 political prisoners in Belarus.
• Perhaps most eye-catching was Hungary's lack of support for the Moscow Mechanism on Belarus, making it the only EU member state not to support the measure.
• And when Sweden, on behalf of the EU, delivered a statement on the Belarus report when it was presented in Vienna on May 11, Hungary didn't sign the statement. The EU-26 text noted, among other things, that "it is the Belarusian authorities and the Belarusian leadership that bear the sole responsibility for the appalling human rights situation, which is meticulously described in this report." So far, Budapest has offered no explanation for its stance but has previously noted that it doesn't want to interfere in the internal affairs of other countries.

Looking Ahead

The highlight of this week will be the summit of the Group of Seven (G7) leading industrial nations on May 19-21 in Hiroshima. There will be symbolism aplenty as the Japanese city, known for being the first military target of a nuclear bomb in human history, hosts Western leaders just as Ukrainian forces are stepping up shelling to dislodge the Russian military near the city of Zaporizhzhya, home of Europe's largest nuclear power plant.

Rafael Grossi, the head of the International Atomic Energy Agency (IAEA), recently said that the general situation in the area near the plant "is becoming increasingly unpredictable and potentially dangerous." The talks will otherwise focus on sending arms to Kyiv, with reports that more countries might follow the United Kingdom in supplying long-range cruise missiles.

On May 16, the EU's culture ministers will meet in Brussels to discuss the state of play of the European Media Freedom Act, which was presented by the European Commission last year. The act, which arguably is the most ambitious and comprehensive legislative proposal concerning media in the EU, would mean that national governments would be banned from interfering with editorial independence and will have to be more transparent about how public funds are allocated to media companies.

Most EU member states are wary of Brussels trying to seize the initiative in an area that they regard as an exclusive national competence, and many prospective EU countries are watching the fate of this act with great interest as Brussels is often very vocal about media freedom issues in candidate countries.

That's all for this week. Feel free to reach out to me on any of these issues on Twitter @RikardJozwiak or on e-mail at jozwiakr@rferl.org.

Until next time,

Rikard Jozwiak

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