The European Union has announced the transfer of €1.5 billion ($1.6 billion) to support Ukraine, marking the first installment of funds generated from profits on frozen Russian assets. This significant move comes as part of a broader strategy agreed upon by the EU’s 27 member states in May to use the interest earned on approximately €210 billion ($225 billion) in Russian central bank assets for aiding Ukraine. These assets were frozen as part of sanctions imposed in response to Moscow’s full-scale invasion of Ukraine.
European Commission President Ursula von der Leyen emphasized the symbolic and practical importance of this financial support. “The EU stands with Ukraine. Today we transfer €1.5 billion in proceeds from immobilized Russian assets to the defense and reconstruction of Ukraine. There is no better symbol or use for the Kremlin’s money than to make Ukraine and all of Europe a safer place to live,” she stated.
The funds, primarily held in Belgium, are expected to provide around €3 billion annually, based on estimates of interest earnings from these frozen assets. This financial support comes at a critical time, with recent reports indicating that Moscow has recaptured two villages in Eastern Ukraine. The EU’s transfer is intended to bolster Ukraine’s defense capabilities and support reconstruction efforts, countering the recent advances by Russian forces in eastern and northeastern Ukraine.
Of the total funds, 90% will be allocated to the European Peace Facility, a special fund used by many EU countries to get reimbursed for arms and ammunition supplied to Ukraine. The remaining 10% will be added to the EU budget and directed towards programs that either support Ukraine’s defense industry or aid in reconstruction, accommodating potential objections from member states regarding military expenditure.
