EU Proposes Redirecting Frozen Russian Assets to Fund Ukraine’s Military Aid

The European Union is considering a plan to redirect 90% of revenues from frozen Russian assets in Europe to fund military aid for Ukraine. The European peace Facility, which provides military support to countries outside the EU, would benefit from proceeds such as interest payments. Russian officials have denounced the plan as potential theft and warned of consequences. Economist Timothy Ash from Chatham House discussed the financial implications, stating that the assets could significantly help Ukraine’s defense funding, which faces a substantial shortfall.

  • The EU’s foreign policy Chief, Joseph Burell, has proposed using 90% of revenues from frozen Russian assets to buy weapons for Ukraine.
  • Proceeds from assets, including interest payments, would be directed to the European Peace Facility.
  • Russian officials have labeled the potential move as theft and have issued warnings about consequences for those involved.
  • Timothy Ash estimates that the total amount of frozen Russian assets in Western jurisdictions is about $330 billion, with the annual cost to fund Ukraine’s defense at around $100 billion.
  • There is currently a financing gap for Ukraine, with $61 billion stuck in the US House of Congress.
  • Ash suggests that Western governments should allocate the underlying assets to help Ukraine meet its military needs and ensure victory.
  • Similar asset seizures have occurred previously, such as during the first Gulf War when Iraqi Central Bank assets were allocated to Kuwait.
  • The argument for seizing assets is bolstered by Russia’s actions, which are considered to be against international law, including invasion and possible war crimes.
  • The decision to use frozen Russian assets is ultimately a matter of political will.
  • Ash criticizes Western governments for preferring to spend taxpayer money rather than utilizing the frozen Russian funds.
  • Ash emphasizes the broader implications for Europe if Ukraine does not receive adequate funding, including increased defense spending and potential social and political instability.

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