A majority of the profits stemming from the frozen Russian assets are set to be handed over to Ukraine, with an agreement tentatively reached by European Union leaders. The possibility of the deal leading to the disbursement of €3bn within the year was put forward by European Commission President Ursula von der Leyen; with the initial billion potentially released by July. This will, nonetheless, hinge on the speed in which said proposition is finalised.
A considerable support was found for the allocation of the proceeds towards military needs in Ukraine. Furthermore, a hike in tariffs for Russian grain entering the EU market is also being explored, this includes grain unlawfully taken from Ukraine.
This decision is the culmination of nearly a year’s discussions around the legal aspects of effectively sequestering €190bn located in the Euroclear, the central securities depository in Belgium. After tweaks in the wording to placate Hungary’s objections, the path was paved for the agreement. However, further discussions reign on how the funding will be divided, with current proposals favouring a 90% towards military programmes, 10% towards reconstruction and a possible allocation for EU-lead peacekeeping missions across the globe.
The risk of legal ramifications remains, particularly in the case that Russia initiates legal action into recuperating the funds post-war. Despite pointing at the legal breaches, EU diplomats echo the sentiment that profits or interest obtained from the frozen assets can be utilised for Ukraine.
Ukrainian President Volodymyr Zelenskiy has urged EU leaders to step up their support, including through air cover to safeguard eastern cities from Russian attacks and releasing frozen assets. His stance remains that the aggressor should bear the brunt of the cost for the war, a sentiment he expressed in a video address to EU leaders. He further suggested taking into consideration the capital in the Belgian bank, a proposition not currently under consideration.
In their meeting, the leaders of the European Union agreed to expedite the membership applications of Ukraine and Moldova, requesting the commission to promptly initiate the negotiation framework for accession. They also concurred on progressing with membership negotiations with Bosnia and Herzegovina once all prerequisites for reforms required for candidacy status are achieved.
The Ukrainian leader, Mr Zelenskiy, expressed his gratitude towards the EU for their financial aid of €5bn from the Ukraine assistance fund which was settled in December, and also for their recent vow to provide ammunition shells as part of a program initiated by the Czech Republic to procure arms outside of the EU jurisdiction.
He suggested that sufficient backing for Ukraine would demonstrate to allies of Putin that similar support could be expected if the escalation of aggression to other European nations was ordered by the unpredictable leader.