– EU proposal to use profits from Russia’s frozen assets to provide $3.3 billion each year for weapons in Ukraine
– Funds could start flowing to Ukraine as early as July if approved by all EU members
– Proposal serves as a compromise solution amid disagreements among Western leaders on how to handle Russia’s immobilized funds.
The European Union is considering a proposal that would use profits from Russia’s frozen assets in Ukraine to fund weapons for Kyiv to fight the war. The plan could provide an estimated $3.3 billion each year to Ukraine, with funds potentially available as soon as July. The proposal involves imposing a windfall tax on profits made by the frozen reserves, with the goal of balancing Western leaders’ differing opinions on the best use of Russia’s immobilized funds.
While some, including US officials, have suggested directly seizing the assets, concerns about financial instability and provoking a Russian response have led to consideration of the windfall tax proposal. The move could still incite tension, as EU Foreign Policy Chief Josep Borrell noted that Russia may not be pleased with the plan. The proposal would allocate funds to the European Peace Facility for military aid to non-EU members like Ukraine and would also allocate 10% to bolster Ukraine’s defense industry.
Ukraine is in dire need of weapons as its conflict with Russia continues into its third year, and although Europe has approved funding to support Kyiv, key US support remains pending due to Congressional debate. The proposal to use profits from Russia’s frozen assets for weapons purchases will be discussed by EU members at an upcoming summit, despite previous pushback from Russian officials regarding discussions about the assets and warnings of potential legal repercussions.