Lithuanian FM: Europe will find way to use Russian assets to support Ukraine

Over 100 European lawmakers are pushing EU leaders to reconsider plans that could utilize frozen Russian assets to aid Ukraine, as Kyiv confronts a €23 billion financing gap for its defense efforts, according to Euronews. Russia has intensified its assaults on Ukraine, with missiles and drones targeting cities and vital infrastructure beyond the front lines.

The Ukrainian capital predicts this winter will be the most challenging of the ongoing full-scale war, underscoring the urgency for dependable funding to maintain air defenses, energy repairs, and military capabilities. A letter signed by 122 Members of the European Parliament (MEPs) from various political parties, published on September 10, advocates for a new proposal to address the legal and financial obstacles that have hindered the utilization of the assets.

The European Union holds over €200 billion in Russian central bank assets, primarily stored in Belgium. The European Commission previously suggested using these assets to provide Ukraine with a zero-interest loan, but EU governments could not reach an agreement due to legal risks, particularly concerns raised by Belgium. As Ukraine braces for another year of conflict, its defense spending demands are escalating.

According to the MEPs, Ukraine has identified a €23 billion financing shortfall. Kyiv requires consistent financing for weaponry, munitions, air defense systems, drones, and other military necessities, as Russia escalates its war and broadens the scope of its attacks. The EU has already granted a €90 billion support loan to Ukraine, but lawmakers contend that this sum does not suffice to cover the nation’s requirements.

The estimated damage resulting from Russia's invasion has already surpassed €600 billion, as per the letter. For Ukraine, obtaining dependable long-term funding is particularly crucial, as it cannot rely indefinitely on numerous EU governments allocating additional funds from their national budgets. The proposal is supported by lawmakers belonging to the European People's Party, Renew Europe, Socialists and Democrats, Greens/EFA, European Conservatives and Reformists, and The Left.

They urge the European Commission to develop a new mechanism capable of assuming the legal responsibilities associated with Russia's central bank assets, enabling the funds to be utilized to support Ukraine without directly transferring the frozen assets to Kyiv. Belgian authorities have been the principal impediment to the prior proposal, as the assets are predominantly held by Euroclear, a financial institution based in Brussels.

The Belgian government is apprehensive that Russia could pursue legal action against Belgium should Moscow's assets be utilized.