The EU has allocated another 1 billion euros to Ukraine: what are these funds?
20 March 11:52
The European Commission has disbursed 1 billion euros to Ukraine as part of a loan from the G7, which will be paid and serviced from the proceeds of Russia’s blocked assets. This is reported on the EC website, Komersant ukrainskyi reports
It is a macro-financial loan assistance for Ukraine, which is to be paid from the proceeds of Russian state assets frozen in the EU.
“Today, the European Commission disbursed an additional €1 billion tranche of its exceptional macro-financial assistance to Ukraine, to be paid from the proceeds of Russian state assets frozen in the EU. This has strengthened the EU’s role as the largest donor since the beginning of Russia’s war against Ukraine,” the statement said.
The European Commission recalled that the total EU contribution under this assistance program for Ukraine is 18.1 billion euros, and its total amount is approximately 45 billion euros.
With the current disbursement, the total amount of loans provided by the European Commission to Ukraine under this macro-finance has reached EUR 4 billion since the beginning of the year.
“Negotiations with Ukraine on the schedule of the next disbursement are ongoing. The European Commission is ready to disburse the remaining MFA funds according to the country’s needs, as called for by European leaders at a special European Council earlier this month,” Brussels said.
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Russian money abroad
About 260 billion euros of the Central Bank of Russia’s assets have been frozen in the form of securities and cash in the jurisdictions of the G7, the EU and Australia, with more than two-thirds of them frozen in the EU. belgium controls €190 billion of assets in euros, the United States controls assets worth between $40 and $60 billion, and the United Kingdom controls about £25 billion.
Currently, the income from these assets is used to cover loans to Ukraine, but the funds themselves remain untouched.
As for the funds of private individuals, the American think tank Atlantic Council claimed at the beginning of the full-scale war that Russians had about $1 trillion of “dark money” abroad. According to a 2020 report, a quarter of this amount is controlled by Putin and his oligarchs. This money is generally off-limits to Ukraine’s Western partners.
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G7 loan initiative
In total, the partners promised to provide Ukraine with about $50 billion. The funds will be serviced and repaid from future profits generated from frozen sovereign Russian assets held in the European Union and other jurisdictions.
The countries discussed the details of the agreement for several months. In the end, it was agreed that the United States would provide up to $20 billion, the EU up to $35 billion, and the United Kingdom would provide almost $3 billion.
According to the Ministry of Finance, about $280 billion of Russia’s frozen sovereign assets are stored in G7 jurisdictions. The G7 countries pledged to keep them immobilized until Russia pays for its crimes against Ukraine.
