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Russian assets will allow Ukraine to finance war until 2028

Russian assets will allow Ukraine to finance war until 2028 Illustrative photo (Getty Images)
Author: Maria Kholina

Ukraine has received a vital military assistance of $61 billion from the United States. However, Kyiv still needs a medium-term financing plan to withstand pressure from Russia, according to Reuters.

The central element of the financing plan should be the mobilization of frozen assets of the Moscow central bank to compensate for the war damages.

Reuters suggests that the American aid package will provide Ukraine with weapons and ammunition until approximately the end of 2025. Therefore, during this period, Ukraine may once again run out of arms.

"Even if Joe Biden is re-elected as U.S. president this November, he may struggle to get more money out of Congress. And if Donald Trump returns to the White House, American support for Ukraine will be even more precarious given the Republican candidate’s previous lack of commitment to Kyiv’s defence," the article states.

A multi-year financing plan for Ukraine would have several advantages. First and foremost, it would provide some insurance against political fluctuations in the United States. It would also bolster the morale of Ukrainians and give Western arms manufacturers more confidence in expanding production.

Russian assets

The main way to get much more money for Ukraine is to mobilize Russian assets frozen by Western countries at the beginning of the war, amounting to approximately $320 billion.

"If the countries guaranteed interest from the assets for a decade, they might raise 30 to 40 billion euros. While this will help, it will not be a game changer because it will fund Ukraine for less than half a year," the report says.

It is emphasized that if Ukraine receives $320 billion, it will be a completely different matter.

"That would finance the war until at least the end of 2028. If the belligerents ended or froze the conflict before then, Ukraine could use some of the money to rebuild its economy, which the World Bank estimates will cost $486 billion," the material says.

Confiscation of frozen Russian assets

Since the start of the full-scale war in Ukraine, Western countries have frozen over $300 billion of Russian assets.

So far, they have not been able to confiscate them due to legal and reputational risks.

In this regard, the United States and G7 countries are considering several options: transferring the proceeds from Russian assets to Ukraine to buy weapons, transferring Russian assets to Ukraine as compensation for Russia's invasion, using frozen Russian assets as collateral for loans to Ukraine.

Vice-President of the European Commission Valdis Dombrovskis stated that $300 billion in frozen Russian assets could be used as collateral for lending to Ukraine.

Earlier, Reuters reported that the Group of Seven countries are considering discussing the idea proposed by the United States to confiscate proceeds from Russian assets at the summit scheduled for June.