(MENAFN) A proposal by the European Union (EU) to utilize profits from Russia's frozen central bank assets to purchase weapons for Ukraine has encountered opposition from several member states, including Malta, Luxembourg, and Hungary, according to a report by Politico. The plan, put forward by European Commission President Ursula von der Leyen, suggests diverting the interest earned from the frozen assets towards arming Ukraine instead of utilizing the funds for reconstruction efforts, as initially intended.
During a meeting of the European Union's 27 ambassadors, Malta, Luxembourg, and Hungary expressed reservations about von der Leyen's proposal, complicating discussions leading up to the European Union leaders' summit in Brussels next week. The reluctance of these member states adds a layer of complexity to the negotiations surrounding the allocation of funds generated by the frozen Russian assets.
Since the onset of the Ukraine conflict two years ago, Western nations have collectively frozen approximately USD300 billion in holdings linked to the Russian central bank. Euroclear, a Brussels-based clearinghouse, retains around EUR191 billion (USD205 billion) of these funds, accruing nearly EUR4.4 billion in interest over the past year alone.
The European Union aims to provide Ukraine with between EUR2 and EUR3 billion from the revenue generated by the frozen assets in the current year, as reported by the Financial Times.
If approved by all European Union member states, the disbursement of the first tranche of funds could occur as early as July. However, Bloomberg notes that some member states remain cautious about the controversial proposal, calling for a more thorough analysis before reaching a decision.
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