For the first time, the European Commission is releasing proceeds from frozen Russian state assets for defence and reconstruction Ukraine free. European Commission President Ursula von der Leyen announced a transfer of 1.5 billion euros, interest income from Russian Central Bank assets frozen in the EU.
“There is no better symbol or use for the Kremlin’s money than making Ukraine and all of Europe a safer place to live,” von der Leyen wrote on X.
The money now flows to countries like Germany or the Czech Republic, which then provide Ukraine with equipment and ammunition. The head of the Commission and EU foreign policy chief, Josep Borrell, made the proposal for the indirect use of Russian funds for Ukraine to the governments of the EU states in March.
It stipulates that 90 percent of usable interest income from the deposit of Russian central bank funds should be channeled to the EU fund for financing military equipment and training, with the remaining 10 percent to be used for direct financial assistance to Ukraine.
210 billion euros frozen
According to the Commission, around €210 billion of the Russian central bank has been frozen in the EU. The Brussels financial institution Euroclear recently announced that it collected around €4.4 billion in interest in 2023.
There are currently no plans to use the Russian central bank funds directly through an expropriation decree. One reason for this is legal concerns and likely retaliation.
The Russian government had already warned the EU last year not to seize the property of the Russian state or Russian citizens. For example, it would be conceivable that companies operating from EU countries in Russia would also be expropriated under duress. Moreover, the direct use of Russian assets could also lead to other states and investors losing confidence in the European financial center and withdrawing assets from the EU.
The Russian government had already criticised in May the plans to use interest income from frozen Russian assets for the benefit of Ukraine as ‘expropriation’.
For the first time, the European Commission is releasing proceeds from frozen Russian state assets for defence and reconstruction Ukraine free. European Commission President Ursula von der Leyen announced a transfer of 1.5 billion euros, interest income from Russian Central Bank assets frozen in the EU.
“There is no better symbol or use for the Kremlin’s money than making Ukraine and all of Europe a safer place to live,” von der Leyen wrote on X.