High Representative of the European Union for Foreign Affairs Josep Borrel will present on Wednesday a plan to seize the revenue generated by Russian assets frozen in the EU after the invasion of Ukraine, to fund arms purchases for Kiev as a priority, he told journalists on Tuesday.
According to him, the nearly €200 billion of Russian funds frozen in the EU could be used to seize around €3 billion a year, 90% of which should be transferred to the European Peace Facility, which finances arms purchases for Ukraine. The rest would go to the European budget, to strengthen the defence industry on Ukrainian soil.
This proposal will be discussed at the summit of the 27 heads of state and government in Brussels on Thursday and Friday.
Initially, Europe was talking about earmarking revenues from frozen assets for reconstruction efforts, but in the meantime a large number of member states are in favour of earmarking them for military support, according to diplomatic sources.
After just over two years of war, the Ukrainian army is short of manpower and is calling for ammunition and air defence systems to contain a Russian army on the offensive. "The summer will be decisive", stressed Borrell, who expects a major Russian offensive against Ukraine during this period.
How the Russian state's frozen assets, and the revenue they generate, should be managed is the subject of intense international debate. Some fear a dangerous signal that could create a chain reaction and ultimately destabilise the financial markets. Belgium is among the first to be concerned, as it is home to Euroclear, the company that manages around €190 billion of immobilised Russian assets.
"The European Central Bank has been fully consulted", stressed Borrell, for whom the time has now come to discuss the matter on the basis of a concrete text, so as to enable a rapid decision to be taken.
