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EU ambassadors agree on using Russian assets revenue to fund Ukraine

by Martin Fornusek May 8, 2024 5:53 PM 2 min read
EU flags in front of the European Commission building in Brussels, Belgium, on Dec. 28, 2023. (Dursun Aydemir/Anadolu via Getty Images)
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EU ambassadors agreed in principle on a measure for using profits from frozen Russian assets to support Ukraine's recovery and military needs, the Belgian Presidency of the EU said on May 8.

Ukraine's Western partners and other allies froze around $300 billion in Russian assets at the start of the full-scale invasion in 2022. Roughly two-thirds are held in the Belgium-based financial services company Euroclear.

"I welcome today's political agreement on our proposal to use the proceeds from immobilized Russian assets for Ukraine," European Commission President Ursula von der Leyen said on X.

"There could be no stronger symbol and no greater use for that money than to make Ukraine and all of Europe a safer place to live."

While the U.S. proposed seizing Russian assets outright in accordance with their recently passed REPO act, the EU has been more hesitant, fearing legal and fiscal pitfalls of confiscation.

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Instead, Brussels seeks to use windfall profits generated by the frozen assets and funnel them to Kyiv.

In March, the European Commission submitted a proposal on using 90% of the generated funds to purchase weapons for Ukraine and allocate the remaining 10% to the EU budget to support the country's defense industry.

The proposed measure would have allocated around 3 billion euros ($3.3 billion) to Ukraine per year.

The plan met opposition from those member states who maintain military neutrality or non-alignment policy and thus opposed funding Ukraine's defense needs, instead preferring to channel the money toward reconstruction efforts.

The final form of the proposition recently approved by EU ambassadors remains unclear.

Media: EU unlikely to reach decision on Russian assets profits during summit
EU leaders are unlikely to reach an agreement on confiscating profits from Russian assets during their summit starting on March 21, namely because Hungary is against using them to boost Ukraine’s military capabilities, Deutsche Welle (DW) reported, citing an unnamed senior European diplomat.
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