Skip to main content

Ukrainian President Volodymyr Zelensky urged European Union leaders holding a summit in Brussels on Thursday to use billions of euros in profits from frozen Russian financial assets to buy arms for Ukraine.

The European Commission, the EU’s executive body, this week proposed transferring 90% of profits from the frozen Russian assets to an EU-run fund used to finance arms for Kyiv.

The Commission estimated the profits on the assets – various Russian central bank securities and cash – could be between 2.5 billion euros ($2.73 billion) and 3 billion euros per year.

“Russia must feel the real cost of war and the need for a just peace,” Zelensky told the EU leaders via video link, backing a proposal he said was “only fair.”

Zelensky said it was “humiliating for Europe” that Ukraine did not have enough artillery in its fight against Russia, which invaded its neighbour in February 2022. He urged the EU to use not only the profits of the frozen assets but also the assets themselves – something the EU is not considering.

Russia said on Thursday its artillery shell production had soared over the past year. On Wednesday, it described the EU plan as banditism and theft.

The idea of using the proceeds of frozen Russian assets to benefit Ukraine has broad support among EU governments, diplomats say. But using the money to buy weapons is more problematic for some countries.

Belgian Prime Minister Alexander De Croo and German Chancellor Olaf Scholz, among others, backed the Commission’s plan as they arrived at the summit.

“These (proceeds) should first of all be used to buy those weapons and ammunition that Ukraine needs to defend itself,” Scholz said, voicing optimism about the chances of the leaders uniting on the subject.

The proposal raises questions for some others, particularly neutral or militarily non-aligned countries such as Malta, Austria and Ireland.

“For us neutrals it must be ensured that money, for which we give our approval, is not spent on weapons and ammunition,” Austrian Chancellor Karl Nehammer said.

Attention will also focus on the reaction of Hungarian Prime Minister Viktor Orban, who congratulated Putin on a re-election which many Western governments condemned as unfair and undemocratic.

No final decision on the assets is expected at the summit. But leaders will indicate how the EU should proceed with the proposal.

“We must make sure that this is, from a legal point of view, extremely well thought through,” Luxembourg Prime Minister Luc Frieden said. Some western banks are lobbying against the proposal, fearing it could lead to costly litigation, industry sources said.

The bloc’s 27 national leaders will also debate how Europe can do more to defend itself and boost its arms industry, reflecting fears that Russia will not stop at Ukraine and the United States may not be such a staunch protector of Europe in future.

“Now that we are facing the biggest security threat since the Second World War, it is high time we take radical and concrete steps to be defence-ready and put the EU’s economy on a ‘war footing’,” said Charles Michel, president of the European Council of EU leaders.

In the two-day summit, the EU leaders will also discuss the war in Gaza, the prospect of opening membership talks with Bosnia, and farmers’ protests, and are expected to consider how greater defence spending should be financed.

French President Emmanuel Macron and others have embraced a proposal by Estonian Prime Minister Kaja Kallas for European defence bonds. Other countries, including fiscally cautious Germany, Austria, the Netherlands and Sweden, are skeptical.

Dutch Prime Minister Mark Rutte reiterated opposition to this as he arrived at the summit. In an interview with Reuters, Kallas said such borrowing was needed urgently.

“The crisis is right now, here. We have to invest in defence now,” she said. “We don’t have the time to wait.”

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe