EU capitals should consider seizing frozen Russian foreign exchange reserves to finance rebuilding Ukraine, the bloc’s top diplomat has said, as the west debates how to force Moscow to pay for the damage inflicted in the conflict.

Josep Borrell, the EU’s high representative for foreign policy, said the US took control of billions of dollars of assets belonging to the Afghan central bank, in part to potentially compensate victims of terrorism as well as for humanitarian aid, and that it would be logical to consider similar steps with Russia’s reserves.

“I would be very much in favour,” said Borrell in an interview with the Financial Times. “We have the money in our pockets, and someone has to explain to me why it is good for the Afghan money and not good for the Russian money.” 

The EU and its allies have frozen hundreds of billions of dollars of foreign exchange reserves parked in accounts by the Russian central bank. Moscow said in March that the central bank sanctions had frozen about $300bn out of its gold and forex reserves, which total more than $600bn.

The latest on the war in Ukraine

• Germany: Chancellor Olaf Scholz said Germany would keep sending heavy weapons to Ukraine, adding that it was Berlin’s historical responsibility to help Kyiv defend itself against Russian aggression.

• CIA assessment: Russia’s president Vladimir Putin “doesn’t believe he can afford to lose; so the stakes are quite high”, CIA director William Burns told the FT Weekend Festival. Read the full interview here.

• Funds: Asset managers, including Danske, Nordea and Jupiter, have moved to shut down funds heavily exposed to Russia.

• Economy: For Ukraine’s entrepreneurs, the conflict poses the biggest challenge since the collapse of communism. Many are looking to help alleviate human suffering and support the war effort.

• May 9: Today is Victory Day in Russia and Europe Day elsewhere in Europe. The coincidence of a cult of military victory and a celebration of peace and unity has long been jarring, writes Martin Sandbu. Today, the clash is more sinister.

Thanks for reading FirstFT Europe/Africa. Here’s the rest of the day’s news — George

Five more stories in the news

1. Sweden’s Social Democrats lean towards Nato Margot Wallström, the former Swedish foreign minister and doyenne of the ruling centre-left Social Democrats, said the decision on whether to join Nato was so sensitive that it could split the party ahead of general elections in September.

2. Sinn Féin victory doesn’t herald UK split, London says British ministers have rejected claims that a historic election victory by pro-Irish unity party Sinn Féin in Northern Ireland heralds the break-up of the UK. Brandon Lewis, Northern Ireland secretary, will today begin trying to coax pro-British unionists to join the region’s government.

• Repercussions: Sinn Féin’s success, the middle-ground Alliance party’s surge and the future of the Democratic Unionist party will spark debate and political manoeuvring, writes former Northern Ireland secretary Julian Smith.

• The FT View: Democracy is weakly rooted in Northern Ireland. While there is widespread backing for constructive government, it is in a rut.

3. Spyware company NSO dodges questions NSO Group has stonewalled questions about whether it is operating legally, according to the US consultancy acting on behalf of the private equity fund that owns 70 per cent of the Israeli spyware company.

4. Johnson under pressure after local elections UK prime minister Boris Johnson will attempt to re-energise his faltering government with a new legislative programme after the Conservative party’s dire local election results last week. Johnson is facing calls to win back voters in the “blue wall” after a poor showing in London, the south of England and Scotland.

5. Trafigura backs UK lithium refinery project Commodity trader Trafigura is to take a stake in a start-up behind ambitious plans to supply car and battery makers in Europe with lithium from a UK refinery. Trafigura will source Green Lithium with feedstock for its planned 50,000-tonne-a-year plant in northern England

The day ahead

Economic data France releases trade balance data; the country’s trade deficit in goods widened to a record €84.7bn last year, creating what finance minister Bruno Le Maire called “a black mark” over the economy.

Corporate earnings German semiconductor maker Infineon Technologies releases second-quarter financials.

Pulitzer Prize The 106th annual Pulitzer Prize winners and finalists will be announced, with awards in journalism, drama, letters and music.

Philippines election The son and namesake of late dictator Ferdinand Marcos is the frontrunner in the Philippines’ presidential election. His running mate is Sara Duterte, daughter of incumbent Rodrigo Duterte. A total of 18,100 legislative, regional, provincial and municipal seats are also up for grabs.

FT’s Future of the Car summit, which runs from today until Thursday, features Tesla founder Elon Musk, who will be speaking and taking questions, along with a host of other industry leaders. Register here.

What else we’re reading

Turkey wrestles with refugees While Europe’s attention has been on the millions forced from their homes by Vladimir Putin’s assault on Ukraine, tension is intensifying in Turkey, host to the world’s largest refugee population, over a longer-running conflict: the 12-year war in Syria.

Money managers in demand The industry for outsourcing investment mandates is booming as challenging markets, compliance regulations and rising costs push big asset owners to seek help. The sector has more than doubled in size since 2016 to $2.46tn in global assets under management.

• More on investment: The concept of acronym investing is coming apart, Ruchir Sharma writes. The unbundling of the Faangs is much like the fall of the Brics emerging markets a decade ago.

Explaining Web3 to beginners Web3 — the new internet — is built with blockchain technology, which supports digital assets such as cryptocurrencies. However, its complexity has been a barrier to participation. New economy investor June Angelides offers a guide to getting a handle on it and discovering its potential.

Bleisure’s moment in the sun The ugly portmanteau describes a cross between business travel and leisure, Emma Jacobs writes. It is hardly new to tack a weekend of sightseeing on to a conference, but as business travel picks up and Covid-19 curbs end, there are reasons to believe this year its time has come.

• Working It: Sign up to Working It, a newsletter that explores the big ideas shaping the world of work today, and listen to the weekly Working It podcast.

The world needs a 12-step programme for better trade The World Trade Organization is broken, and the first step towards a solution is admitting there is a problem with the old model of globalisation. The world needs a newer, faster way to resolve trade disputes and balance international trade with domestic politics, argues Rana Foroohar.

Food & drink

Why do so few restaurants get their bread right? For starters, cooking and baking are more different than many realise. There are many factors to consider in bread baking, and the process requires dedicated time, space and money.