European Union Approves Use of Russian Frozen Funds for Weapons Procurement

The European Union’s historic decision to use money from Russia’s frozen funds is at its final stage. It is estimated that the interest received is around three billion euros per year. The European Commission proposed how to get rid of them back in March. The money will not be used to restore Ukraine, as was originally planned, because the war is still far from over, but for more important expenditure items, such as weapons. It was proposed that 90% of the amount be sent to the European Peace Fund, from which the participating countries will reimburse the costs of military equipment for Ukraine, and also use this money to buy weapons. The remaining 10% was proposed to be sent to the EU budget, and then spent on Ukraine’s defense industry. Most of the EU countries liked the idea, including the most influential ones.

Neutral states that are not members of NATO opposed it: Austria, Malta, Cyprus, Ireland. Hungary and Slovakia, which in principle criticize the military strategy of the European Union, refused to participate in the purchase of weapons for Ukraine. And to allocate allocations from the European Peace Fund, approval is required from each country. That is why no payments from him have been made for the past year: they are blocked by Budapest. But the German Chancellor said yesterday that an agreement to spend profits from the fund on weapons was close. If an agreement is reached, Ukraine may receive the first installment before the summer.

“This is a large sum, amounting to several billions a year in Europe,” said Chancellor of Germany Olaf Scholz.

See also: “Crossing the “red lines.” Britain allowed Kyiv to hit Russia with its weapons, and France does not refuse to send military personnel to Ukraine

Editing politics citing diplomats who spoke on condition of anonymity, they said the Belgian presidency of the EU had proposed a new version of the agreement. He insists that countries that are not ready to spend money on weapons can provide humanitarian aid to Ukraine. How much money are we talking about? And how will this be technically resolved? Don’t know yet. There is no clarification in the publication. On May 8, the ambassadors of the EU member states will try to reach a consensus. They will also try to convince those who fear lawsuits from Russia and that the euro area could be unstable. There is still no decision on what should be done with the Central Bank’s own frozen Russian assets, which the US Treasury estimates at three hundred billion dollars. They will continue to look for him at the G7 summit in June. The issue of full custody, which the Financial Times recently reported, was taken off the agenda due to fears of retaliatory measures, as well as being accused of breaking international law. national. It protects sovereign assets.

“We are talking about six billion dollars at the lowest estimate for two years of war. For Ukraine this is a lot: 2-2.5% of our GDP. It makes it possible to cover 1/8 of our state budget deficit for this year In addition, it seems that the Russian Federation itself, represented by the Central Bank, said goodbye to them a long time ago, especially judging by the statements of the Bank. Central of the Russian Federation in the last meetings that the head of the Central Bank had with business representatives, it seems that they have not really decided this issue for themselves, but they have accepted that they will not these funds are no longer available,” Ukrainian economist Oleg Ustenko, a former adviser to the President of Ukraine on economic issues, explained to the Present Time.