EU Agrees to Send $3.2B of Frozen Russian Assets to Aid Ukraine

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Facts

  • Belgium, the current President of the Council of the European Union (EU), Wednesday announced that the bloc's ambassadors have agreed 'in principle' to send revenues generated from frozen Russian assets held in the EU to Ukraine.1
  • The agreement allows Euroclear — which holds the majority of the bloc's frozen Russian assets — to keep just over 10% of the generated profits, while nearly 90% will be sent to Ukraine through the European Peace Facility to buy weapons.2
  • EU windfall revenues from Russian assets are estimated at $3.2B annually. Belgium, where Euroclear is based, has also allowed a mandatory 25% tax charge from the profits to be directed into a fund intended for Ukraine beginning in 2025.3
  • The European Trade Commissioner has said that nearly $1.1B could reach Ukraine by summer, while European Commission Pres. Ursula von der Leyen said there was 'no stronger symbol and no greater use for that money.'4
  • The EU holds, in total, approximately $225B in assets from Russia's central banks. Following the agreement by EU ambassadors, the deal must be officially approved by the bloc's member states.5

Sources: 1twitter.com, 2Euronews, 3euractiv.com, 4BBC News and 5apnews.com.

Narratives

  • Pro-establishment narrative, as provided by chathamhouse.org. Repurposing Russian profits is necessary to finance the ongoing war effort and ensure the successful rebuilding of Ukraine after the conflict. Vladimir Putin is unlikely to cooperate in a reparations campaign, so the West must act proactively and do what is right against Putin's hypocritical objections.
  • Establishment-critical narrative, as provided by RT. The seizing of frozen Russian assets is legally dubious and incredibly damaging to international confidence in the West's financial institutions. By using profits that are rightfully Russian, a dangerous and irreversible precedent will be set that the West will regret. This move will do little but encourage divestment from the Western world.
  • Nerd narrative, as provided by metaculus.com. There's a 70% chance either the US or EU will seize sovereign Russian assets in 2024, according to the Metaculus prediction community.