EU thaws 1.4 billion euros in profits from Russia to aid Ukraine
EU foreign ministers, against Hungary's wishes, have sealed a deal to furnish military aid to Ukraine, with funds sourced from the interest accrued on frozen Russian Central Bank assets within the EU. This move has sparked outrage in Hungary, who view it as crossing a "red line".
From July, Ukraine stands to receive €1.4 billion in additional military aid from the European Union, as announced by EU foreign policy chief Josep Borrell following talks in Luxembourg. For the first time, EU officials are tapping into interest earnings from Russian frozen assets to aid Kiev. Previously, Hungary had hindered the release of these funds. The foreign ministers have devised a method to circumvent the pro-Russia government in Budapest.
Borrell reportedly presented the ministers with a legal analysis, suggesting that Hungary no longer needs explicit approval for the first installment payment. Previously, there were resolutions in place regarding the use of the funds, with the Orban government choosing to abstain during the votes. As Borrell stated, "The EU treaty offers legal avenues to advance".
Hungary has vehemently protested against the planned €1.4 billion payment. Foreign Minister Peter Szijjarto expressed this through a Facebook video, decrying the actions of the other 26 countries as crossing a "red line". Hungary is now exploring legal options in response. Szijjarto accused EU partners of disregarding Hungarian decision-making rights and engaging in a "flagrant violation of common European rules". Szijjarto found it hypocritical to uphold the rule of law and democratic values while gradually disregarding said rules.
Borrell hinted at further tranches for Kiev in the near future. This year, the EU estimates that around €3 billion can be generated from interest earnings. In total, the EU has frozen over €200 billion of the Russian Central Bank's reserves.
Germany to acquire military equipment for Ukraine with the funds
The plan to use the €1.4 billion interest earnings, which was agreed upon several weeks ago by the EU, was uncertain due to Hungary's blockade policy. It's now planned that the funds will be channelled to nations like Germany or the Czech Republic in the coming weeks, who will provide Ukraine with air defense equipment or artillery shells promptly.
The other EU states justify their decision to bypass reaching consensus, citing Hungary's abstention during the initial vote on the use of the frozen assets. This abstention is now being perceived as implicit approval for subsequent decisions without Hungary's involvement.
The G7 countries have pledged a €50 billion loan to Ukraine, with the funds to be sourced from the interest on frozen Russian assets. This loan is anticipated to be available by the end of the year. The EU finance ministers had their first discussion on this plan, with specific implementation proposals expected in July.
