EU to hand Ukraine first 2-3 billion euros from proceeds of frozen Russian assets

EU countries are preparing to transfer to Ukraine the first 2-3 billion euros that were received as income from blocked assets of the Russian Central Bank, the Financial Times has quoted European officials as saying.

According to them, the funds may be transferred to Kyiv as early as this July. The European Commission will officially present the relevant proposal before the summit of the EU leaders next week in order to obtain the approval of all member states of the association.

From the draft of the European Commission, which was familiarized with the FT, it follows that Brussels expects to use 97% of the net profit received from frozen Russian assets in the depository Euroclear. These funds will be transferred to the EU budget on a quarterly or biannual basis and “can be used for the benefit of Ukraine in accordance with various agreements”, the document says.

However, the EU plans will not be retroactive and Euroclear will retain its already accumulated profits of around €3.85 billion to cover the legal costs of the proceedings with Russia. The depository is already facing more than 100 lawsuits in Russia over the freezing of private investors’ assets, and Russian courts may order the seizure of about 33 billion euros worth of Western assets blocked at the National Settlement Depository, EU officials said.

In total, about 190 billion euros of Russian sovereign assets have been frozen at Euroclear since the start of the war in Ukraine. By 2027, the return on these funds could amount to €20 billion, European officials told the FT.

Initially, the EU planned to use these funds for the reconstruction of Ukraine, but now they are discussing the possibility of directing them to military aid. In particular, in February, the head of the European Commission Ursula von der Leyen allowed the purchase of weapons for the AFU on these funds.

According to the Ukrainian Finance Ministry, the EU and IMF have so far allocated about half of the $37 billion the country needs from international partners in 2024.

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