Borrell suggests using 90% of frozen Russian funds' income for arming Ukraine
Josep Borrell. Photo: Kristin Olsson/TT News Agency via Reuters
The head of diplomacy of the European Union, Josep Borrell, proposed to use 90% of the revenues from the assets of the Russian Federation frozen in Europe for the purchase of weapons for Ukraine through the European Peace Fund.
The European diplomat will present this proposal to EU member states on March 20, ahead of the EU leaders' summit on March 21-22, Reuters writes.
Borrell added that the remaining 10% should be directed to the EU budget to strengthen the potential of the Ukrainian defense industry.
A senior EU official said last week that Russian assets frozen in the European Union could generate between €15 billion and €20 billion in after-tax profits by 2027, depending on global interest rates.
About 70% of all Russian assets immobilized in the West are held in the Belgian central securities depository Euroclear, which has the equivalent of 190 billion euros in various securities and cash of the Russian central bank.
Borrell emphasized that the proposal uses the profits from the assets held in Europe, not the assets themselves. According to him, it can bring about 3 billion euros annually.
"The specific proposal will be presented tomorrow. The member states must agree to it," the European diplomat emphasized.
Borrell also emphasized that the €5 billion European Military Aid Fund was created to support Ukraine, not to develop the European defense industry, so EU countries can use it both to order ammunition and compensate for their purchase outside the EU.
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The Security Service of Ukraine (SBU) arrested nearly ₴190 billion worth of assets of Russian business people who financed the war during 2022-2023 and as of early August.
Moreover, Ukraine's partners are rushing to agree on a plan to confiscate $300 billion of frozen Russian assets. The United States has proposed to the "Group of Seven" working groups to study how to do this.
On February 24, the Group of Seven (G7) countries released a statement confirming that they would keep Russian assets frozen in their jurisdictions until the end of Russia's full-scale war against Ukraine.
Also, the United States has, for the first time in history, transferred confiscated Russian assets to Estonia, which will be used to support Ukraine.
The European Council approved a resolution paving the way for using profits from frozen Russian assets for Ukraine.
The President of the European Commission, Ursula von der Leyen, proposed that the European Union consider using the proceeds from frozen Russian assets to benefit Ukraine, including purchasing military equipment.
Minister of Foreign Affairs Dmytro Kuleba welcomed the initiative of the President of the European Commission, Ursula von der Leyen, regarding the use of profits from frozen Russian assets for the purchase of military equipment for Ukraine. According to his conviction, the allies must also find the necessary legal grounds and political will to use the revenues and the assets themselves.
It is worth adding that the European Union has prepared a legislative proposal, according to which Ukraine will start receiving profits from the blocked assets of the Russian Central Bank already in July: the funds will be directed to the supply of weapons and the development of the defense industry.
