EU states Ukraine could receive €1 bn from frozen Russian assets by July

The European Commission has pledged to provide Ukraine with up to €1 billion in profits from Russian assets impounded by the EU, potentially as early as July, according to commission chief Ursula von der Leyen. This comes after the EU’s 27 member states agreed to give Ukraine up to €3 billion annually from the interest generated by these frozen assets. Most of the funds would be used to support Ukraine’s military efforts against Russia.

“Strong support” has been shown for using the profits from these immobilised assets for Ukraine’s military needs, asserted von der Leyen as she welcomed the leaders’ endorsement. If the proposal is swiftly concluded, the first instalment of €1 billion could be disbursed by July. The European Peace Facility would facilitate the flow of 90% of these proceeds as members’ refunds for their arms donations to Ukraine, while 10% would aid Ukraine’s post-war rebuilding efforts.

Nevertheless, this decision was reached despite the fact that the constitutions of some EU member states, such as Austria and Ireland, do not permit the provision of lethal weapons to conflict parties. Austria’s Chancellor, Karl Nehammer, insisted that his government would need assurances that any Austrian contributions would not be used for military purposes.

About €210 billion of assets from the Russian central bank have been immobilised in the EU since Russia initiated a full-scale invasion of Ukraine in 2022. These assets are mainly held at Belgium’s Euroclear financial depositary. Using these assets does pose significant legal risks, which is why Brussels is exercising significant caution in its proceedings.

However, the EU has fallen short of its goal to supply Kyiv with one million rounds of ammunition this month, delivering only half the aimed amount. This shortfall, coupled with diminishing backing from the U.S., has had severe repercussions for Ukrainians on the front line. Consequently, individual member states have begun their initiatives, with several countries participating in a Czech-led endeavor to send approximately 800,000 shells to Ukraine in the coming months.