(MENAFN) Kremlin spokesman Dmitry Peskov has issued a stern warning that Russia will retaliate against the European Union following its decision to transfer EUR1.5 billion (USD1.6 billion) in frozen Russian assets to Ukraine. The move, announced by European Commission President Ursula von der Leyen via social media platform X (formerly Twitter), aims to support Ukraine's defense and reconstruction efforts amid ongoing conflict with Russian-backed separatists.

In response to questions from reporters, Peskov condemned the European Union's actions as "illegal" and emphasized that Russia would formulate a calculated and comprehensive response aligned with its national interests. He underscored that the European Commission's decision to allocate funds from frozen Russian assets would not go unanswered, signaling potential diplomatic and economic repercussions.

The conflict surrounding the frozen assets dates back to the escalation of the Ukraine crisis in 2022, when Western powers froze nearly USD300 billion belonging to the Central Bank of Russia, primarily housed within Euroclear, the European Union's largest depository. Earlier this year, Brussels approved a plan to utilize interest accrued from these funds to bolster Ukraine's recovery efforts, with the majority earmarked for military aid and a portion allocated for broader support initiatives.

The recent announcement by the European Union to begin disbursing interest earnings from frozen Russian assets marks a continuation of efforts by Western nations, including the Group of Seven (G7), to leverage financial mechanisms in support of Ukraine. The G7 had previously agreed to use interest earnings to finance a substantial loan aimed at facilitating Ukraine's procurement of arms and rehabilitation of critical infrastructure.

As tensions persist between Russia and the West over the handling of frozen assets and support for Ukraine, the Kremlin's vow to retaliate underscores the volatile diplomatic landscape and ongoing geopolitical maneuvering in the region.

MENAFN28072024000045015687ID1108490746