Spain proposes using frozen Russian assets for Europe’s defense, beyond Ukraine
Photo: Spanish Minister of Economy Carlos Cuerpo (facebook.com/profile.php?id=61555531446253)
Spain has proposed the creation of a new defense fund using frozen assets from the Russian Central Bank. The idea is to provide non-repayable grants, not only for supporting Ukraine but also for strengthening Europe's defense lines, reports Bloomberg.
Spain's Minister of Economy, Carlos Cuerpo, introduced the proposal for such a temporary tool to fund large-scale, pan-European projects. He called on his EU colleagues to join the initiative.
"This is the time for European solidarity to support Ukraine and Eastern frontline countries. We need to invest together in defense, which is a genuinely European public good that benefits our citizens and bolsters our economic security," Cuerpo said on the sidelines of a meeting in Warsaw.
Bloomberg explains that some countries in the bloc face a lack of funding. This means the EU needs to find additional financing options for the long-standing underfunding, and one of the topics discussed was the creation of new pan-European tools.
Unlike the proposed options based solely on concessional loans, Spain wants to provide EU countries with grants, particularly those in the East, which are more vulnerable to the Russian threat.
The proposed Spanish instrument, designed as a targeted mechanism, would be funded through contributions from member states, joint EU debt, and the European Stability Mechanism's rescue fund.
Additionally, Madrid has stated that part of the Russian Central Bank's frozen assets in Europe, totaling €200 billion ($227 billion), could also be used to finance military projects benefiting Ukraine.
EU Economic Commissioner Valdis Dombrovskis told reporters after the meeting that the Commission is "ready to explore new ways and options." He added that Spain's focus on supporting the eastern region "fits well in the discussion we are having."
Speaking alongside the Commissioner, Polish Finance Minister Andrzej Domański, who chaired the meeting, said that the overwhelming majority of ministers believe additional defense funding tools may be necessary. He also called the solidarity shown by some southern EU members "encouraging."
As a reminder, it was recently reported that EU finance ministers were set to discuss the creation of a joint intergovernmental fund that would purchase and own defense equipment. As announced, the UK and Ukraine may also be part of this initiative.
