Ukraine will receive the first delivery of funds stemming from the revenue of frozen Russian assets in July, the European Commission said on May 21.
Ukraine’s Western partners and other allies froze around $300 billion in Russian assets at the start of the full-scale invasion in 2022. Roughly two-thirds are held in the Belgium-based financial services company Euroclear.
In March, the European Commission submitted a proposal on using 90% of the generated funds to purchase weapons for Ukraine and allocate the remaining 10% to the EU budget to support the country’s defense industry.
After many weeks of debates, EU ambassadors reached a political agreement on the proposal on May 8.
That does make it sound less good, but there’s also a compelling pro-Ukrainian argument for using revenue (and other funds) rather than the seized assets for defense. It’s widely agreed that Ukraine is owed those assets for reconstruction. Many want to liquidate them as an alternative to directly funding the defense effort, which could harm Ukraine’s ability to rebuild after the war. So it’s sort of robbing future-Ukraine to pay for the present. It’s especially risky because countries tend to lose focus of things like reconstruction and get distracted by the next shiny conflict or crisis.
That obviously depends on Ukraine’s allies continuing to fund their defense though.