The European Commission is preparing a plan to support Ukraine’s defense with up to €3 billion ($3.28 billion) generated from frozen Russian assets held by the Belgium clearing house, Euroclear, the Financial Times (FT) reported.
The proposal will likely be submitted for discussion at an EU leader summit next week and were it to be approved by European capitals, could be delivered to Kyiv as early as July this year.
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In the wake of US Congressional wrangling over defense funds for Ukraine, European Commission President Ursula von der Leyen has called for the frozen profits to be used to support Ukraine’s military – versus for post-war reconstruction as was initially envisioned, FT reported.
That said, the leader’s plan is likely to face opposition from Hungary, which maintains warm relations with the Kremlin despite its ongoing invasion of Ukraine – and which has opposed military aid to Kyiv.
EU officials said the plan is not retroactive and will only involve profits generated from frozen assets from February onwards – a much scaled-down version of plans, initially floated at the G7, which didn’t gain enough support – to turn most of the €260 billion ($284 billion) in frozen assets over to Kyiv.
Euroclear holds most, €190 billion ($207 billion), of these assets. The assets at Euroclear have already generated €3.85 billion ($4.2 billion) in profit since Russia’s Feb. 24, 2022 full-scale invasion started. However, Ukraine would receive what would remain of the profits after legal fees from litigation from the over 100 lawsuits from Russia over the frozen assets. So, depending on interest rates, Ukraine could receive somewhere between €2 billion ($2.2 billion) and €3 ($3.3 billion) after EU capitals come to an agreement on sending the money.
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According to FT, the assets are expected to generate about €20 billion ($22 billion) in profits by 2027.
As the FT reported, Russia may seek to seize some €33 billion ($36 billion) in Western assets frozen by Russia’s central securities depository.
The EU plan follows newly adopted legislation last month that created a path for confiscated funds to be transferred to Ukraine.
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