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Uncle Joe

(58,362 posts) Thu Mar 21, 2024, 09:01 PM Mar 21

E.U. Finds a Way to Make Russia Pay for Weapons for Ukraine

Using interest earned on frozen Russian assets held in Europe, the bloc plans to raise billions. But other ways to pay for new weapons remain elusive.

A Ukrainian armored vehicle near Bakhmut in eastern Ukraine, last month. Soldiers on the front lines are reporting shortages of ammunition.Credit...Lynsey Addario for The New York Times

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After Russia’s invasion of Ukraine more than two years ago, Western nations took the unusual step of freezing more than $330 billion in Russian central bank assets held overseas. The bulk of them — over $217 billion — is in the European Union. With payments to Russia blocked by sanctions, Moscow has been unable to gain access to those assets, sell them or benefit from interest earned on them.

As such, cash generated from the assets has remained stuck overseas, with a vast majority held in Belgium by Euroclear, a financial services company. Under the E.U. plan, 97 percent of profits generated by those assets as of Feb. 15 would go to Ukraine. Companies like Euroclear would retain 3 percent to fund ongoing and future litigation by Russia trying to claw back its assets and revenues.

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“The Russians will not be very happy,” Josep Borrell Fontelles, the top E.U. diplomat, said this week. The amount of money, he added, “is not extraordinary, but it is not negligible.”

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The revenues from the frozen Russian assets are a start, but the European Union will need billions more to continue supporting Ukraine and bolster its own defense, particularly with the looming possibility of a complete rupture in American aid to Ukraine under a Trump presidency.

https://www.nytimes.com/2024/03/20/world/europe/eu-russia-weapons-ukraine.html

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