EU to table plan to use frozen Russian assets to arm Kyiv

BRUSSELS, Belgium — Brussels will propose to EU countries using revenues from frozen Russian assets, worth an estimated 3 billion euros a year, to help arm Ukraine, the bloc’s foreign policy chief said on Tuesday.

The European Commission is set to put forward its plan to member states on Wednesday, on the eve of a summit of the EU’s 27 leaders in part focused on support for Kyiv.

Foreign policy Chief Josep Borrell said the proposal envisioned that 90 per cent of the profits made on the assets would go to a fund used to cover the cost of weapons for Ukraine.

The other 10 per cent would go into the EU’s budget to be used to help increase the capacity of Ukraine’s own defence industry.

“If member states agree it will be about 3 billion euros per year that we can get from the frozen assets revenue,” Borrell said.

The push by the EU to find more funds for Ukraine comes as a $60 billion support package from Kyiv’s other major backer, the United States, remains blocked in Congress.

Dwindling weapons supplies two years into the war have left Ukraine’s forces outgunned on the front line and struggling to halt Russia’s advances.

The EU froze some 200 billion euros of Russian central bank assets held in the bloc as punishment after Moscow invaded its neighbour in February 2022.

About 90 per cent of those funds are held by the international deposit organisation Euroclear, based in Belgium.

EU countries have been wrangling for months over what to do with the Russian assets, amid calls from some member states and other Western allies to go further and seize the entire amount to pay for rebuilding Ukraine.

Countries such as Germany have been hesitant to touch the funds frozen in the EU out of fear that it would undermine investor faith in European markets.

Borrell said the European Central Bank had been consulted on the proposal and that it was now time for member states to take a decision as the war in Ukraine reaches a crucial stage.

“The summer will be critical,” he said.

“Russia is hitting the positions of Ukraine every day in order to weaken them and when the spring and summertime comes, for sure, we’ll see increased military activity.”