EU agrees: proceeds from Russia’s frozen assets to Ukraine’s weapons
The European Union will invest the lion’s share of the proceeds from frozen Russian assets in the defense of Ukraine. The EU countries have agreed on this, says current EU President Belgium.
The billions of assets of the Russian central bank, which were frozen when Russia invaded Ukraine two years ago, yield an estimated 2.5 to 3 billion euros in interest and dividends annually. This should benefit Ukraine, the EU countries have been saying for some time. They initially wanted to invest in the reconstruction of the country, but Ukraine is so desperate for weapons and ammunition that that is now taking precedence.
“The money will serve to support Ukrainian reconstruction and military defense in the context of Russian aggression,” Belgium said. The “agreement in principle” must still be ratified one of these days by the council of ministers of the EU countries. That has sometimes gone wrong lately. Countries such as Hungary, the most Russian-friendly EU member state, sometimes want to change their minds.
The managers, in particular the Belgian money office Euroclear, will soon be allowed to withhold less from the return on the Russian assets. They will soon charge 0.3 percent, while previously it would have been ten times as much. Of the rest of the proceeds, 10 percent also serves as a buffer, in case Russia, for example, comes to seek redress.
Of the remaining nearly 90 percent, 90 percent goes to Ukrainian military efforts. The surplus will be given a non-military destination. For example, the EU wants to accommodate traditionally neutral member states such as Ireland, Austria and Malta that do not want to contribute to warfare.
A quarter of the proceeds have so far been collected by the Belgian tax authorities, to the annoyance of the Netherlands and other countries. Belgium wants to transfer that money to Ukraine from next year, provided that other EU member states and major Western allies such as the United States, Canada and Japan do the same. Belgium previously promised to donate part of the tax collected this year to Ukraine.
Ukraine can expect the first billion euros from this new source of income as early as this summer, European Commission President Ursula von der Leyen said earlier.
