(MENAFN) German Chancellor Olaf Scholz has proposed utilizing the interest earned from Russian assets frozen by the European Union to procure weapons for Ukraine. The suggestion comes amidst ongoing efforts to support Ukraine's defense capabilities in the face of escalating conflict.
Following the seizure of approximately USD300 billion in assets belonging to the Russian central bank by the United States and its allies in February 2022, discussions have ensued regarding the allocation of the interest generated from these funds. While the European Union has refrained from confiscating the assets outright, there have been proposals to utilize the interest for strategic purposes, including arms purchases for Ukraine.
Speaking after a meeting with the governments of Lithuania, Latvia, and Estonia in Riga, Chancellor Scholz endorsed a proposal put forth by European Union foreign policy commissioner Josep Borrell. The proposal suggests allocating around 90 percent of the interest to procure weapons for Ukraine through the "European Peace Facility" program, with the remainder allocated to European Union budgets to support Kiev's own military industry.
Scholz emphasized the importance of bolstering weapons production within the European Union, particularly in light of challenges in meeting Ukraine's demands for arms and ammunition. Despite significant pledges of military and financial aid from the United States and its allies to Ukraine, there remains a pressing need for additional support to ensure Ukraine's defense capabilities.
While Kiev has called for the confiscation of all frozen Russian assets to help fund the conflict, there have been differing views within the European Union regarding this approach. While the United States and Canada have expressed support for such measures, the European Union has remained cautious. The proposal put forward by Chancellor Scholz signals a potential step towards utilizing frozen assets to bolster Ukraine's defense efforts amidst ongoing hostilities.
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