(MENAFN) A proposed European Union plan to utilize the profits generated by Russia's frozen central bank assets within the bloc to purchase weapons for Ukraine has encountered resistance from several member states, including Malta, Luxembourg, and Hungary, as reported by Politico on Thursday, citing an European Union official.
European Commission President Ursula von der Leyen had put forward the idea last month, suggesting that the interest earned from the frozen assets be redirected towards acquiring arms for Ukraine, deviating from the original plan of utilizing the funds for reconstruction efforts.
During a meeting of the European Union's 27 ambassadors on Wednesday, Malta, Luxembourg, and Hungary voiced reservations about von der Leyen's proposal. Their opposition has complicated discussions leading up to the European Union leaders' summit scheduled in Brussels for the following week, according to Politico's report.
Since the onset of the Ukraine conflict two years ago, Western nations have collectively frozen approximately USD300 billion in holdings belonging to the Russian central bank. Euroclear, a Brussels-based clearinghouse, holds around EUR191 billion (USD205 billion) of these funds and has accrued nearly EUR4.4 billion in interest over the past year.
The European Union aims to allocate between EUR2 and EUR3 billion in revenue generated by the frozen assets to Ukraine this year, as reported by the Financial Times earlier this week. If approval from all member states can be secured, the first tranche of funds could be disbursed as early as July, according to European Union officials cited by the outlet.
However, some member states remain cautious about the contentious proposal, emphasizing the need for a more thorough analysis, as highlighted in a separate Bloomberg report on Tuesday. The differing stances among European Union members underscore the complexities surrounding the allocation of frozen Russian assets for Ukrainian weapons amid ongoing diplomatic tensions and geopolitical considerations.
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