Russia's frozen assets can fund Ukraine's military operations until 2028 – Reuters
Photo: General Staff of Ukraine's armed forces
The United States provided Ukraine with $61 billion in crucial military assistance. However, Kyiv still requires a medium-term financial plan to withstand the ongoing attacks from the Russian Federation.
Reuters reports this.
According to the publication, the central aspect of the financing plan should revolve around using the frozen assets of the Central Bank of Moscow to compensate for the damages incurred by the war.
The publication assumes that the American aid package will provide Ukraine with weapons and ammunition until approximately the end of 2025. Therefore, in the same period, Ukraine may run out of weapons again.
"Even if Joe Biden is re-elected to the post of US president this November, he may have a hard time getting additional funds from Congress. And if Donald Trump returns to the White House, American support for Ukraine will become even more questionable, given that that the candidate from the Republicans had not previously shown readiness for the defense of Kyiv," the article reads.
The publication believes that a multi-year financing plan for Ukraine would have several advantages. First, it would provide some insurance against US political fluctuations.
It would also boost Ukrainian morale and give Western arms manufacturers more confidence in ramping up production.
The primary way to get much more money for Ukraine is to mobilize Russian assets, which were frozen by Western countries at the beginning of the war, amounting to about 320 billion dollars.
"If countries guarantee the payment of interest on assets for ten years, they will be able to collect 30 to 40 million euros. Although this will help, it will not change the situation, as it will finance Ukraine for less than half a year," the article says.
At the same time, it is emphasized that if Ukraine receives 320 billion dollars, it will be an entirely different matter.
"This will make it possible to finance the war at least until the end of 2028. If the warring parties stop or freeze the conflict by this time, Ukraine can use part of the money to restore its economy, which, according to the World Bank, will cost 486 billion dollars," the article reads.
For reference:
Since the beginning of the full-scale war in Ukraine, Western countries have frozen more than $300 billion of Russian assets.
So far, they have not been confiscated due to legal and reputational risks.
In this regard, the USA and the G7 countries are considering several options: transferring income from Russian assets to Ukraine for the purchase of weapons, transferring Russian assets to Ukraine as compensation for the invasion of the Russian Federation, or using the frozen assets of the Russian Federation as collateral for granting loans to Ukraine.
Earlier, the vice-president of the European Commission, Valdis Dombrovskis, stated that 300 billion dollars of the Russian Federation's frozen assets could be used as collateral for lending to Ukraine.
On February 28, the President of the European Commission, von der Leyen, suggested that the European Union consider using profits from frozen Russian assets to benefit Ukraine, mainly to purchase military equipment.
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.
On March 19, the Head of Diplomacy of the European Union, Josep Borrell, proposed to use 90% of the revenues from the Russian Federation's assets frozen in Europe to purchase weapons for Ukraine through the European Peace Fund.
