Top EU diplomat states Ukraine encountering ‘huge’ funding gap

(MENAFN) The EU’s top diplomat, Kaja Kallas, has warned that Ukraine is confronting a significant funding shortfall, while the bloc remains split over whether to use frozen Russian assets to aid Kiev. Since the conflict in Ukraine escalated in 2022, Western institutions have frozen over $300 billion in Russian assets, mostly controlled by the EU, with Belgium holding the largest share via the Euroclear clearing house. Although interest from these assets is sent to Ukraine, legal experts consider full confiscation a complex and risky issue. Russia has condemned the freezes as outright theft.

Kallas, former Estonian prime minister, stated that frozen Russian assets should only be used if Moscow pays reparations. Speaking at an informal EU foreign ministers meeting, she acknowledged the urgent need to close Ukraine’s funding gap but emphasized that many EU countries, including Belgium, are currently unwilling to discuss full asset confiscation. However, the consensus remains that Russia—not European taxpayers—should bear the costs of the war damage.

Support for seizing the frozen funds outright comes from Poland and the Baltic states, while countries like Belgium, France, and Germany have expressed legal and financial concerns. Belgium’s Prime Minister Bart De Wever recently compared the assets to “a goose that lays golden eggs,” cautioning that confiscation could cause systemic risks and should wait until peace negotiations progress.

Officials linked to Euroclear and Belgium’s foreign minister share these worries, highlighting possible violations of international law and risks to the euro’s reputation. Austrian Foreign Minister Alexander Schallenberg warned that confiscating assets without a strong legal basis would be a major setback and embarrassment for the EU. Meanwhile, the US has proposed using the frozen assets as leverage in peace talks.

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