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5 Mar, 2024 15:22

EU mulling using frozen Russian assets for Ukrainian army – Borrell

The funds belonging to Moscow’s central bank have accrued nearly €4.4 billion in interest over the past year
EU mulling using frozen Russian assets for Ukrainian army – Borrell

The EU is discussing the option of using profits generated by frozen Russian assets for not only reconstruction in Ukraine, but also for military support, the bloc’s foreign policy chief, Josep Borrell, has said. 

EU nations agreed unanimously in late January to set aside billions of euros of windfall profits from frozen Russian funds in Europe, to help fund Ukraine’s reconstruction. 

If EU members agree that the assets can be used to rebuild Ukraine, they can also be used to “avoid the destruction” of the country, Borrell said at a news conference in Brussels on Tuesday, TASS reported. 

“That means to increase Ukraine’s military capacity or defense and technology base,” he added.

“The potential use of windfall profits from frozen Russian assets for deliveries & procurement of military support for Ukraine, which can be done through the European Peace Facility, is another step forward,” Borrell said in a separate statement posted on X (formerly Twitter).The European Peace Facility is an off-budget mechanism being used to funnel weapons to Ukraine. 

The West has frozen roughly $300 billion in holdings belonging to the Russian central bank since the start of the Ukraine conflict two years ago. Brussels-based clearing house Euroclear holds around €191 billion ($205 billion) of them and has accrued nearly €4.4 billion in interest over the past year.

While the US and UK have been pushing for actions to outright seize the funds, the EU has warned about the legal and financial implications of such a move and has opted instead for a plan to seize the interest earned from the funds.

Moscow has warned that it will respond in kind if the West goes through with threats to confiscate Russian assets blocked abroad. Finance Minister Anton Siluanov noted last month that Western states themselves still have holdings in Russia that could be jeopardized if the frozen funds are tapped.

The EU, along with the US, has been providing military aid to Ukraine, with individual countries such as Germany and Spain sending tanks and weapons, and the bloc providing artillery shells.

EU countries should do whatever it takes to provide Ukraine with the ammunition it needs, Borrell said last month, after Kiev’s counter-offensive stalled and the Russian military continued its advance against Ukrainian forces in Donbass, including the liberation of the key town of Avdeevka.