NOS News•today, 5:24 PM
EU ambassadors have reached an agreement to use profits from frozen Russian assets to purchase weapons and humanitarian aid for Ukraine. This amounts to approximately 3 billion euros per year.
It was one of the first steps the EU took after the Russian invasion of Ukraine in February 2022; Freeze Russian assets. In total, the Russian Central Bank has now frozen approximately 260 billion in assets in the US, Japan, EU and Canada. Of this amount, a record amount of 191 billion is held in Brussels, with Euroclear. This is an institution that acts as an intermediary in transactions on the financial markets.
The European Union does not want to touch the frozen assets itself. But the member states now want to give the profits on those frozen assets, such as interest and other returns from investments, to Ukraine. This must be done through a special fund; the so-called Ukraine Assistance Fund. In total this amounts to around 3 billion euros per year.
The option of using Russian assets to provide aid to Ukraine has been under discussion for two years. Ukraine in particular wanted this; the country would prefer to see all frozen assets go to Ukraine.
There were long negotiations in Brussels about releasing the money for Ukraine, because all member states had to agree. It is an unprecedented step to obtain frozen assets from other countries. At the end of April, Russia warned the West not to touch the money, otherwise there would be a “strong reaction”.
Of the billions, 90 percent will go into the special fund, which will then be used to pay for weapons and ammunition for Ukraine.
A small group of EU Member States do not support the purchase of weapons (Malta, Austria and Ireland), because they are constitutionally neutral. To accommodate these countries, it has been agreed that 10 percent of the money will be used for humanitarian aid, for example.
