European Leaders held Emergency Talks to discuss Support for Ukraine on Sunday. It came amid Souring Relations between the U.S. and Ukraine, raising Pressure on Europe to Step-Up. One Quick way to Raise "Game-Changing" Cash would be to seize $218 billion in Frozen Russian Assets. Amid growing Tensions between Washington and Kyiv, calls are Growing for Europe to take an Unprecedented step that could Unlock billions in Funding for Ukraine.
Some World Leaders and Politicians, including former UK Prime Minister Rishi Sunak, are urging European Countries to Seize the roughly $218 billion in Frozen Russian Central Bank Assets, now largely held in Brussels, and hand them to Ukraine. "It is only fair that Russia should pay for the damage its war has caused," Sunak wrote in an Opinion Piece on Friday.
The Question of Funding was a Hot Topic on Sunday, as EU and UK Leaders met with Ukrainian President Volodymyr Zelenskyy for Emergency Talks in London, to Discuss Kyiv Support, just days after the Uunprecedented Oval Office Clash with Trump (R) and Vice President JD Vance (R).
The Situation has fueled Questions over how Europe can Step-Up to Help Aid Ukraine's Defense efforts should the U.S. Reduce, or Cut altogether, its Support for the War-Torn Nation. For Europe to make up the Difference would be an Expensive Prospect, and One that could come with Political Repercussions, which makes the Potential to Unlock $218 billion in Non-Taxpayer Money all the more Attractive.
"We've got all of these different countries with their own internal political battles, and their own internal budgets, all trying to find more cash, and we're sitting on a game-changing amount of funding," Heather Buchanan, the Chair of the Athena Foundation, an Economic Policy Advisory Nonprofit that Supports the Move. The EU holds the Majority of the roughly $300 billion in Russian Funds Frozen by the U.S. and International Allies after Moscow launched its Full-Scale Invasion in February 2022. The Funds have been Earmarked for Rebuilding Ukraine in Peacetime.
Some of the Interest earned on those Funds has been Transferred to Ukraine as Loans. The UK's Chancellor of the Exchequer, Rachel Reeves, and Ukraine's Finance Minister, Sergii Marchenko, Signed a Deal on Saturday to deliver another £2.26 billion, or about $2.8 billion, to Ukraine from the Accrued Interest, also as a Loan. But there's now Growing Support for a Long-Considered Option: Seizing All those Frozen Funds, which would allow them to be Transferred directly to Ukraine for use in its Defense.
In December, 2024, Kaja Kallas, the EU's Top Diplomat, called for the Move, and it's seen Support in the past week from Leaders in: Estonia, Finland, Poland, and UK. On Saturday, a Coalition of Campaign Groups and UK MPs brought Together by the Athena Foundation, called on the UK to get the Ball Rolling with the Seizure of £25 billion, or about $31.4 billion, of Russian State Assets now Frozen in the UK Financial System.
Adrian Karatnycky, a Non-Resident Senior Fellow with the Atlantic Council's Eurasia Center, wrote in Foreign Policy Magazine in January, that the full $300 billion in Frozen Assets could Replace the U.S. Contribution to Ukraine for the Next Six or Seven years, if Trump were to Cut Support to Kyiv.
While many Politicians are Pushing for the Move, some Aanalysts warn that it should be a Last Resort because of the Impact it could have on Global Economies. For example, Permanently Confiscating Russian Assets held in Countries that aren't at War with Russia could also "increase the risk perceived by several other countries," Creon Butler, the Director of Chatham House's Global Economy and Finance Program, wrote last year.
Other Countries such as: China, India, and Saudi Arabia, may "fear that at some point they could be subject to similar measures,"He wrote. Sunak, writing for The Economist, has Argued that those Concerns are "overstated" and that this risk "can be Contained."
There's also a Debate among Analysts over whether the Assets should be kept available as a Bargaining Chip for any Future Peace talks Legal Complications must also be considered, as the Assets of a Foreign Nation are normally Protected against Seizure by a Host Country. But the Leading Lawyer Paul Reichler previously argued to Congress, that such Protection falls Apart when a Host State carries out "egregiously wrongful conduct," as He said Russia had. "If Congress has the power to authorize the executive to freeze a foreign state's assets, it must also have the power to authorize the executive to transfer them," He said.
Buchanan said that such a Move does require Legislation but that "that's what lawmakers are for," adding that Meeting a Satisfactory Legal Standard could be brought about "quite quickly." A further worry is the Prospect of Retaliation by the Kremlin, whose State Duma is discussing a Draft Bill allowing it to Confiscate Foreign Property in response to similar Moves from "Unfriendly Countries".
Buchanan said Passing the Cash to Ukraine would Send a "Crystal Clear" signal to Russia that this Money isn't coming back, potentially dealing a Strong Psychological Blow to a Country whose Economy and Labor Market are already Deeply Strained by the War. The Question is whether Western Leaders will take the Leap. "It's just political will at this point," She added.
To Support Ukraine in its Long-Term efforts to Recover from the War and Work towards EU Membership, the EU has launched a Dedicated Financial Instrument for the years 2024 to 2027. The Ukraine Facility enables the EU to provide Ukraine with up to €50 billion in Predictable and Flexible Financial Support during this Period. €16.4 billion has already been Disbursed to Ukraine under the Facility.
The Bottom Line is that the EU has Provided more Overall Funding then U.S. About 65% is in Grants or In-Kind Support, with 35% in the form of Loans with lengthy Repayment Periods.
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