The bloc struck a deal to use Russia’s windfall gains to finance humanitarian aid and weapons
The European Union announced this Tuesday (May 8, 2024) that it will allocate profits from Russia’s frozen assets to help Ukraine. The agreement was reached after a meeting between diplomats from the bloc, who chose the Belgian government to manage the process.
Much of Russian assets have been frozen in Belgium since the invasion of Ukraine in 2022. In the country, financial services company Euroclear holds €191 billion of the Russian Central Bank’s €260 billion in assets.
The bloc decided that Russia no longer has a legal right to the amount. Despite the consensus, one of the biggest challenges for European countries will be to work out an agreement that considers the Belgian government’s 25% tax on the profits of large companies.
Belgium should consider a voluntary plan to transfer the taxes collected to the Ukrainian government from 2025, according to the British newspaper The Guardian.
The final amount that will be allocated to Ukraine has not yet been disclosed. The European Union defined that 90% of the donation will be used in arms aid for the country’s government. The remaining 10% will be allocated to other types of contributions.
Ireland, Austria and Hungary opposed the full use of funds for military purposes.
Ursula von der Leyen, president of the European Union commission, celebrated the agreement. “There could be no stronger symbol or better use for that money than making Ukraine and all of Europe a safer place to live”he declared.
