European Union Finds Legal Way to Use Frozen Russian Assets to Arm Ukraine
Under immense pressure to provide support for Ukraine’s military and replenish their own dwindling arsenals, the European Union announced on Wednesday that they have devised a legal method to utilize frozen Russian assets to assist in arming Ukraine. This development comes as the EU explores various avenues to bolster their defense industries amidst ongoing conflicts.
With U.S. funding for Ukraine stalled in Congress and the country facing shortages of essential military supplies like ammunition and missiles, the EU’s plan to utilize frozen Russian assets marks a significant milestone. The goal is to hold Russia accountable for Ukraine’s military needs and reconstruction efforts, a sentiment that has gained popularity among allies.
The European Commission, the EU’s executive branch, has proposed a plan that could provide Ukraine with up to 3 billion euros annually, with the potential to reach 15 billion euros from 2023 to 2027, depending on market conditions. The first payment to Kyiv could be as soon as July, pending approval by EU leaders in Brussels.
Following Russia’s invasion of Ukraine, Western nations froze over $330 billion in Russian central bank assets held overseas, with the bulk of them located in the EU. The plan outlined by the EU would allocate 97 percent of profits generated by these frozen assets to Ukraine, primarily for military support. The remaining 3 percent would fund legal expenses related to Russia’s attempts to reclaim the assets.
While the plan has faced delays and disagreements among member states and concerns from the European Central Bank, the EU is determined to find ways to raise funds for defense purchases. The need for increased defense spending has become more urgent, especially in light of recent remarks by former President Donald J. Trump, who questioned NATO’s defense commitments to European members.
In addition to utilizing frozen Russian assets, the EU is exploring other avenues to raise funds for defense, including potential involvement of the European Investment Bank in defense purchases and the issuance of joint bonds for cheap funding. The urgency to bolster military capabilities is evident across the EU, with some nations already taking proactive steps to support Ukraine.
As discussions continue at the EU summit in Brussels, the focus remains on finding sustainable solutions to support Ukraine’s defense needs and strengthen the EU’s defense industry. The use of frozen Russian assets represents a significant step towards achieving these goals, despite objections from Russia and legal concerns raised by some policymakers.
