15:40 24 Jun 2024

EU allocates €1.4 bln in military aid for Ukraine from frozen Russian asset profits — Politico

The European Union countries approved the first portion of military aid to Ukraine on June 24. This aid amounts to 1.4 billion euros and will be allocated from Russia's frozen funds.

Politico writes about this with reference to four diplomats, and Radio Svoboda's correspondent Rikard Jowiak reports this.

The money is channeled through the Ukraine Aid Fund, but Hungary blocked the payments. Now, the legal service of the EU Council claims that Budapest cannot stop these payments because it abstained from the vote earlier this year on the creation of the Fund.

The reason that allows the bypass is that the funds do not come from taxpayers, officials said.

The final amount Kyiv will receive is unknown, but diplomats say it is between 1.2 and 1.4 billion euros.

The money will be used to make direct purchases for the military, including ammunition and air defense systems. A quarter of the amount will be used for purchases in the Ukrainian industry.

According to the publication, the countries had to express their opinion on the tranche by 11:00, and none voted against it. The decision did not require unanimity, meaning Hungary could not block it.

Despite today's agreement, the Hungarians continue to block the payment of 6.6 billion euros to Ukraine's armed forces as partial compensation for the weapons purchased from Ukraine.

According to one diplomat, Budapest is "furious" about what happened today.

The agreed tranche is expected to be officially announced later today at a meeting of EU foreign ministers in Luxembourg.

For reference:

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.

It's important to note that the European Union has drafted a legislative proposal to allow Ukraine to begin receiving profits from the frozen assets of the Russian Central Bank as early as July. These funds will be used for the purchase of weapons and the advancement 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.

On May 8, EU permanent representatives agreed to use the proceeds from frozen Russian assets to support the recovery of Ukraine and its military defense against Russian aggression.
It should be noted that the European Union's countries will not currently participate directly in the $50 billion loan that the "Big Seven" group plans to provide to Ukraine.

"The United States, as well as Canada, Great Britain and, probably, Japan, within their constitutional limits, have already announced (and will provide) a loan [to Ukraine – ed.] in the amount of about $50 billion," the Italian PM said at a press conference according to the results of the G7 leaders' summit.

It is worth adding that the United States is ready to lend Ukraine $50 billion, which will be repaid with profits from frozen Russian assets, provided that the European Union can extend sanctions against Moscow indefinitely.

According to open information, Euroclear currently has 192 billion euros of Russian Central Bank assets on its balance sheet. The EU is looking for legal mechanisms to deal further with these frozen resources and the interest accrued on them, which has reached €5 billion over the past two years.


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