Ukraine War - The EU releases interest from frozen Russian assets
The EU is releasing for the first time interest payments from frozen Russian state assets for the defense and rebuilding of Ukraine. EU Commission President Ursula von der Leyen announced a transfer of 1.5 billion Euros.
"There's no better symbol or better use for the Kremlin's money than making Ukraine and all of Europe a safer place to live," she wrote on X, formerly Twitter.
Money to go towards military technology for Ukraine
The money in question are interest payments from the Russian Central Bank's assets in the EU. Using this money for Ukraine was already decided by the EU in the spring. The money is now being channeled to countries like Germany or the Czech Republic, which then make military equipment for Ukraine's air defense or artillery shells available.
According to Commission statements, around 210 billion Euros of the Russian Central Bank's funds are frozen in the EU. The Brussels-based financial institution Euroclear recently reported having earned around 4.4 billion Euros in interest in 2023.
Commission President von der Leyen and EU Foreign Policy Chief Josep Borrell made the proposal for indirect use of Russian funds for Ukraine to the EU member states in March. They plan to direct 90 percent of the usable interest earnings from the custody of Russian Central Bank funds in the EU towards the EU funds for the financing of military equipment and training. The remaining ten percent are to be used for direct financial aid for Ukraine.
Kremlin speaks of "expropriation"
Directly using Russian Central Bank funds through an expropriation decree is not planned. Legal concerns and likely retaliatory measures are cited as reasons. Moscow had already warned the EU the previous year not to confiscate the property of the Russian state or Russian citizens.
The Russian Central Bank's plans to use interest payments from frozen Russian funds for Ukraine's benefit have been criticized by the Kremlin as "expropriation". However, Brussels decided on a "tempered version" in its actions against Russia, as Kreml spokesman Dmitry Peskov put it at the time. "But even this tempered version is nothing more than expropriation", he added.
- This move by the EU to utilize interest payments from frozen Russian state assets will primarily contribute to enhancing Ukraine's military capabilities, specifically in areas like air defense and artillery.
- Despite the Kremlin's criticism of the EU's use of interest payments from frozen Russian funds as "expropriation", Brussels has opted for a more measured approach to prevent potential legal issues and retaliatory measures.
- The European Union's decision to channel interest payments from Russian assets towards the financing of military equipment and training for Ukraine is part of a broader effort to support Ukraine in its conflicts with Russia.
- The Russian Central Bank's assets, currently frozen in European Union member states, have become a source of controversy, with the EU and Russia having starkly different views on how these funds should be utilized, with the EU seeing it as a means to support Ukraine's defense and the Kremlin viewing it as an "expropriation."
