(UnitedVoice.com) – The Western world has spent hundreds of billions of dollars sending weapons and other aid to Ukraine. There’s a concern that it’s not sustainable in the long term. The European Union just approved a plan that will alleviate some of the burden — at the expense of Russia.
On May 21, the EU announced it was going to use the windfall profits (interest) from frozen Russian assets to buy arms for Ukraine. That would reportedly equal about $3 billion in the first year. After the Russian military launched its invasion, European countries quickly seized the assets Russia’s central bank was holding outside of the country. The European Union seized between $200 and $300 billion of aid.
Reuters reported that Dmytro Kuleba, Ukraine’s foreign minister, thanked the EU for the decision. However, he said his country would like to use all of the assets, not just the windfall profits.
US Treasury Secretary Janet Yellen is reportedly going to try to convince the Group of Seven members to use the profits from the assets as collateral for a larger loan to help the Ukrainian government.
After the countries seized the money, they disagreed about what to do with it. Some of them, and the US, wanted to use it to pay for Ukraine’s military needs. Germany and France disagreed, expressing concern that it could set a bad precedent if allies were allowed to seize assets from adversarial governments. The European Central Bank was also afraid that seizing assets could hurt the Euro.
To settle the dispute, the EU agreed to start using the interest from the frozen assets. They will use 90% of the profits to provide weapons and ammunition and the remaining 10% would be put toward nonlethal aid.
Kirill Logvinov, Russia’s acting Permanent Representative to the EU, said the plan would “have unpredictable consequences for the Eurozone, the economies of bloc members and the investment climate.” He accused the European nations of stealing from his country and said they would eventually be obligated to pay Russia back for the seized assets.
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