EU moves to give profits from Russian assets to Ukraine

EU member states’ ambassadors have tentatively agreed to redirect windfall profits from frozen Russian assets towards financing arms supplies for Ukraine, pending approval by EU finance ministers next week. This decision follows the freezing of hundreds of billions of euros in Russian assets after the 2022 invasion of Ukraine. If approved, the accrued interest, estimated at up to €3 billion per year, will be allocated for purchasing weapons for Ukraine.

European Commission President Ursula von der Leyen emphasized the significance of this action, stating it would contribute to enhancing the safety of Ukraine and Europe. Valdis Dombrovskis, European Trade Commissioner, echoed this sentiment, urging swift delivery of the funds to Ukraine, with an initial tranche of €1 billion intended for military support ideally reaching the country by summer.

German Chancellor Olaf Scholz advocated that approximately 90% of the revenues from frozen Russian assets be allocated to arms purchases for Ukraine. The value of these assets in the EU stands at nearly €211 billion, with the majority of profits held by Euroclear, a Belgium-based clearing house.

The decision to utilize these funds had been delayed due to objections from EU members regarding a 25% tax imposed under Belgian law, which has since been waived. Despite concerns raised by Europe’s central bankers about potential legal ramifications and impacts on global financial stability, the decision reflects a determination to hold Russia accountable for its actions. The Kremlin has criticized this move as undermining European and international legal frameworks.

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