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EU Agrees to Use Frozen Russian Assets for Ukraine’s Defense

Daniel Kim Views  

The European Union (EU) agreed on May 8th (local time) to use the interest from frozen Russian assets within the Union as a fund for arms support to Ukraine.

The Ukrainian Parliament (Rada) passed a bill on the same day to draft prisoners to address the troop shortage.

◇ EU tentatively agrees to use 90% of the annual €4.4 billion ($4.8 billion) interest from frozen Russian assets as a fund for arms support to Ukraine

The Belgian government, which is the rotating presidency of the EU for the first half of the year, announced through X (former Twitter) that “EU ambassadors (27 countries) have in principle agreed on measures related to extraordinary revenues derived from frozen Russian assets.”

They added, “This money will support Ukraine’s reconstruction and military defense in the face of Russia’s invasion.”

This tentative agreement came about a month and a half after the European Commission proposed on March 20th to use about 90% of the income from the operation of frozen Russian assets as a fund for Ukraine. After a detailed review, this agreement will be officially confirmed at the EU Finance Ministers’ meeting on the 14th.

As reported by BBC, if implemented, the annual maximum €3 billion ($3.3 billion) interest from frozen Russian assets will be used for Ukraine’s weapons purchases.

Volodymyr Zelenskyy, President of Ukraine (right side, second from the right), and David Cameron, UK Foreign Secretary (left side, middle), are in a meeting in Kyiv, Ukraine on May 2nd (local time)./Ukrainian Presidential Spokesperson’s Office·AP·Yonhap News

The Russian Central Bank assets frozen by the EU in response to Russia’s invasion of Ukraine on February 24th, 2022, amount to €211 billion ($232 billion). Of these, €191 billion ($210 billion) is tied up in Euroclear, a Central Securities Depository (CSD) in Belgium.

In February, Euroclear reported that the annual interest on the frozen Russian assets was €4.4 billion ($4.8 billion). The tax on this interest is €1.085 billion ($1.2 billion), which is about 25%. The Belgian government has agreed to exempt this tax, as the British daily The Guardian and BBC reported.

If the agreement is implemented, 90% of the interest from the frozen Russian assets will be transferred to the European Peace Fund (EPF), a special EU fund for military support to Ukraine. The remaining 10% will be used as non-lethal aid funds for reconstruction projects in Ukraine, considering Austria, Ireland, Malta, Cyprus, and others that oppose arms support to Ukraine.

This agreement is separate from the U.S.’s plan to seize all the principal of the frozen Russian assets to support Ukraine within the framework of the Group of Seven (G7). The EU is still skeptical about touching the principal of the frozen Russian assets due to a lack of legal basis and other reasons.

On April 24th, U.S. President Joe Biden signed $95 billion in the U.S. security budget, including $60.8 billion for Ukraine and support for Israel, Taiwan, and others.

Sophie, Countess of Wessex (center), Volodymyr Zelenskyy, President of Ukraine (left), and his wife Olena Zelenska are having a conversation in Kyiv, Ukraine on April 30th (local time)./Ukrainian Presidential Spokesperson’s Office·AP·Yonhap News

◇ Ukrainian Parliament passes a bill to draft prisoners…Up to 20,000 prisoners to be mobilized to address the shortage of troops in the war that has lasted over two years

Ukraine is pursuing a plan to draft prisoners to address the shortage of weapons and troops.

The Ukrainian Parliament passed an overwhelming majority vote on the same day in a plenary session to introduce a conditional parole system for mobilizing prisoners with less than three years remaining in their sentence, as reported by local media and the New York Times (NYT).

Violent criminals such as murderers and sexual offenders, corrupt public officials, security-related offenders, drunk driving offenders, and drug offenders are excluded from the draft.

This bill will take effect once it is signed by the Speaker of the Parliament and President Zelenskyy. However, the court must decide on the mobilization and parole of willing prisoners.

David Arakhamia, the parliamentary leader of the Servant of the People party, said that if this bill is finally decided, they can mobilize 15,000 to 20,000 prisoners.

Earlier, Zelenskyy had been pursuing various measures to address the shortage of troops to be deployed in the Russian invasion war, which has lasted over two years and two months. One measure was signing a bill on April 2nd to lower the draft age from 27 to 25.

Zelenskyy announced in February that 31,000 Ukrainian troops had been killed in this war. Still, the NYT pointed out that this is much lower than the estimate of 70,000 Ukrainian troops killed last summer reported by U.S. officials.

Daniel Kim
content@viewusglobal.com

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