For defense and reconstruction

EU: Frozen Russian assets flow to Kiev

Ukrainian soldiers of a mobile air defense unit - Money from a new source will soon be available for the defense against the Russian attack.

(Bild: AP ( via APA) Austria Presse Agentur/Andriy Andriyenko)

On Tuesday in Brussels, the Council of EU member states approved the use of the proceeds from frozen Russian assets. 90 percent of the funds are to be made available for military support for Ukraine, ten percent for reconstruction.

According to the EU Commission, around 210 billion euros from the Russian central bank have been frozen in the EU due to Russia's war of aggression against Ukraine. The EU Commission plans to transfer the first funds to Ukraine as early as July. The proceeds amount to 2.5 to three billion euros per year. The EU Commission presented its proposal for their use at the EU summit in March. According to the proposal, 90 percent of the money should flow into weapons and ammunition for Ukraine and ten percent into the defense industry and the reconstruction of the country.

Concession to neutral countries
This is to be seen as a concession to neutral countries such as Austria, which do not want to participate directly in the supply of weapons and ammunition. It was therefore agreed that some of the interest income would also flow into other financial aid. There are currently no plans to directly access Russian central bank funds by means of an expropriation decision. EU representatives have so far cited legal concerns and possible retaliatory measures by Russia as reasons for this.

Where is the money going?

• The billions are not going directly to Kiev, but to so-called facilities - EU instruments with which predictable financial support can be provided transparently.
• 90 percent of the money is earmarked for defense and will go to the European Peace Facility.
• Ten percent goes to the budget of the Facility for Ukraine, which is intended to help with the recovery, modernization and reconstruction of the country.

Assets have decreased
In Austria, frozen Russian assets have decreased significantly. While it was still 2 billion euros at the end of 2022, it is currently only 1.5 billion euros, according to the Directorate of State Security and Intelligence (DSN). This is due to exchange rate fluctuations and exemptions, according to the DSN. The National Bank (OeNB) confirmed this in response to an APA inquiry. Due to the exceptions, frozen assets were also released again by the National Bank.