EU Parliament Approves €35 Billion for Ukraine Recouped from Russian Assets – Unclear if Available for Defense
Windfall profits from frozen Russian state assets will be used to repay the loan, but it remains unclear how much the EU will actually disburse and allow Ukraine to spend on defense.
The European Parliament voted for an extraordinary loan of up to €35 billion ($37.84 billion) to Ukraine, backed by revenues generated from $280 billion worth of frozen Russian assets.
The new funding will be disbursed until the end of 2025.
Previously Kyiv Post reported that Ukraine may also receive funds arising from Russia’s frozen assets in the form of a loan, but “the burden of a loan will not fall on Ukraine,” Wally Adeyemo, the US Deputy Secretary of the Treasury, said during a briefing to reporters on May 29 in Kyiv.
- Kyiv Post source in the Ministry of Finance said that negotiations were taking place to make the loan unconditional, as a compensation for Russia’s unprovoked aggression in February 2022.
The EU parliament tied the new macro-financial assistance to “Ukraine’s continued commitment to uphold effective democratic mechanisms, respect human rights, and further policy conditions to be set out in a memorandum of understanding.”
“Additionally, the management and control systems outlined in the Ukraine Plan, along with specific measures to prevent fraud and other irregularities, will apply to the MFA loan,” the EU parliament stated.
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- The financial transaction will consist of several contributions, with the largest chunk of €35 billion ($37.84 billion) provided from the EU, but also from the US, the UK, Canada and Japan.
- It is also unknown whether this cash could be allocated for use in Ukraine’s military defense against Russia's invasion of the country.
- “Not all of our international partners understand that this $50 billion is not just about budget support for non-defense, but also for security-related purposes,” Betliy wrote.
The loan will be financed from the profits received from frozen Russian Central Bank assets of $280 billion.
- $191 billion of Russia’s central bank assets are held by Euroclear, a clearing house situated in Brussels.
- In February it reported €4.4 billion ($4.75 billion) in interest had been generated by the funds which could provide Belgium with €1.085 billion ($1.17 billion) in taxes, according to The Guardian.
- Meanwhile, the EU parliament reported €210 billion ($227.01 billion) in assets from the Central Bank of Russia are held in the union and they “remain frozen under sanctions imposed over Moscow's invasion of Ukraine in February 2022.”
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