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EU plans to allocate Ukraine 3 billion euros from frozen Russian assets by summer - FT

EU plans to allocate Ukraine 3 billion euros from frozen Russian assets by summer - FT The EU intends to allocate Ukraine 3 billion euros from frozen Russian assets (photo: Getty Images)

The European Union insists on allocating Ukraine up to 3 billion euros already this year from the profit received from frozen Russian assets, against the background of a decrease in economic support for Ukraine from the US, according to the Financial Times.

According to several European officials, the European Commission is preparing a plan that will include the confiscation of sanctions-related profits, starting from February, received in the central securities depository Euroclear.

After months of wrangling, a first tranche of money could be disbursed as early as July if Brussels can secure the approval of member states, officials said. The proposal is expected before a summit of EU leaders next week.

About €190bn in Russian sovereign assets have been immobilized at Euroclear since Moscow’s full-scale invasion of Ukraine in 2022, generating €3.85bn in profits.

The latest plans would provide between €2bn and €3bn to Ukraine this year, depending on interest rates, the officials said. The total profits siphoned from Euroclear could reach €20bn by 2027.

It is noted that the depository holds the majority of the assets of the Russian Central Bank, amounting to 260 billion euros.

According to a draft seen by the Financial Times, the European Commission's plan involves appropriating 97 percent of the net profit from frozen Russian assets held by Euroclear and transferring it to the EU budget. "The money would then be paid out every quarter or twice a year and “could be used to the benefit of Ukraine according to different arrangements”, the draft says.

The EU’s plans would not apply retroactively, and the nearly €4bn in profits already accrued will be kept by Euroclear, mostly to cover legal fees from litigation with Russia.

Use of Russian assets

After Russia invaded Ukraine, Western countries froze Russian assets worth approximately 300 billion euros. The majority of these assets are frozen in the Euroclear depository located in Brussels, which has yielded 3.25 billion euros in profit from these assets.

At the end of February, the President of the European Commission, Ursula von der Leyen, stated that it is time to start a conversation about using the unforeseen profit from frozen Russian assets for joint purchases of military equipment for Ukraine.