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EU to use Russian assets to buy arms for Ukraine – Scholz

The German chancellor has clarified that profits obtained from Moscow’s funds held in the EU will be used to arm Kiev

German Chancellor Olaf Scholz has said that interest accrued from Russian assets frozen in the EU will be used to purchase weapons for Ukraine.

Soon after Russia launched its military operation against Ukraine in February 2022, Western countries froze approximately $300 billion of funds belonging to the Russian Central Bank. Of that sum, the Brussels-based clearinghouse Euroclear holds around €191 billion ($205 billion), which has accrued nearly €4.4 billion in interest over the past year.

Speaking at a joint press conference with French President Emmanuel Macron and Polish Prime Minister Donald Tusk in Berlin on Friday, Chancellor Scholz said: “We will use windfall profits from Russian assets frozen in Europe to financially support the purchase of weapons for Ukraine.

The German leader also announced plans to establish a “new capability coalition for long-range rocket artillery,” with procurement to take place “on the overall world market.”

The German chancellor did not provide specifics, and it remains unclear whether he was referring to an entirely new initiative, or to a “long-range” scheme announced by President Macron in February.

European Commission President Ursula von der Leyen last month suggested using the interest from frozen Russian assets to buy weapons for Ukraine. However, Politico, citing an anonymous EU official, reported on Thursday that Malta, Luxembourg and Hungary had “expressed reservations” about the plan earlier this week.

Moscow has repeatedly warned that any actions taken against its assets would amount to “theft.” It has stressed that seizing the funds or any similar move would violate international law and undermine Western currencies, the global financial system, and the world economy.

March 19, 2024 - Posted by Christina Macpherson | business and costs, EUROPE, weapons and war