Frozen Russian assets: EU proposes using proceeds for Ukrainian military equipment
Ursula von der Leyen (Photo: EPA)

President of the European Commission Ursula von der Leyen said that the European Union should consider using the profits from frozen Russian assets to purchase military equipment for Ukraine, Reuters quoted her as saying.

"It is time to start a conversation about using the windfall profits of frozen Russian assets to jointly purchase military equipment for Ukraine," she said in her speech to the European Parliament.

She emphasized that there cannot be a stronger and better use of this money than "making Ukraine and all of Europe a safer place to live." Von der Leyen said the threat of war for the EU "may not be imminent, but it is not impossible."

"The risks of war should not be overblown, but they should be prepared for and that starts with the urgent need to rebuild, replenish, modernise member states' armed forces," she said.

She also presented the new European Industrial Defense Strategy, which her commission will present in the coming weeks, noting that one of its main goals will be to prioritize joint procurement.

"Europe should strive to develop and manufacture the next generation of battle-winning operational capabilities. That means turbo-charging our defence industrial capacity in the next five years," said the President of the European Commission.

However, in her opinion, the strengthening of European efforts in the field of defense will not reduce the need for the NATO alliance.

According to Bloomberg, published by yesterday, the proposals in the defense strategy include:

→ the minimum level of joint purchases of defense equipment and a change in the tendency to purchase military systems from suppliers from outside the EU;
→ mechanisms that would ensure the immediate increase of critical supplies in the event of a shortage or crisis, as well as prompt identification of critical dependence on third countries;
→ expansion of industry access to finances and EU funding programs and creation of new partnerships in the field of defense and security;
→ determination of flagship projects on which efforts and resources should be concentrated.

Read also: EU fears Russian escalation in case of arrests of assets for Ukraine – Politico

On January 23, it became known that the EU plans to impose a tax on excess profits from the frozen assets of the Central Bank of Russia, but without confiscating the funds. A group of countries, including Germany, made it clear that they were against the seizure of Russian assets for legal reasons.

However, on January 29, EU ambassadors reached a "principled" agreement to use the proceeds of frozen Russian assets to help Ukraine.

After the massive missile attack on February 7, Zelenskyy said that one of Ukraine's goals for 2024 is to inflict maximum systemic losses on Russia. In particular, he said, this applies to frozen Russian assets, both of the terrorist state and of individuals associated with it.

On February 12, the EU Council took a step toward using Russian assets for the benefit of Ukraine by adopting a decision that obliged European depositories to keep separate records of frozen securities and income from them. The depositories are also prohibited from disposing of the profits earned from transactions with these assets.