Generate revenue from the 285 trillion won tied up and provide support to Ukraine
The European Union (EU) has taken the first step toward financing Ukraine with Russia’s frozen assets.
According to Politico on the 12th (local time), the European Commission announced a plan to support the proceeds of Russian assets frozen in the EU to support the reconstruction of Ukraine. The proposal is broadly related to the Ukraine-specific fund that will be discussed at the EU summit held on the 14th and 15th.
EU officials have been seeking ways to extract revenue from about 200 billion euros (about 284.548 trillion won) of assets tied up in the EU since Russian President Vladimir Putin launched his invasion of Ukraine in February last year.
Russian securities are maturing and financial intermediaries are reinvesting them and generating profits. “The EU is trying to target these revenues,” said an anonymous EU official.
The gist of the Commission’s proposal is to force the proceeds of invested Russian assets to be deposited in a separate account at a clearinghouse. For the plan to be implemented, it must obtain unanimous consent from EU member states.
If the plan is agreed upon, the Commission must come up with a plan to transfer the cash to the EU budget and then transfer it to Ukraine.
European Commission President Ursula von der Leyen emphasized, “The proceeds from Russia’s frozen funds should be used to finance Ukraine’s long-term reconstruction, which the World Bank estimates to be worth $411 billion (approximately 542.109 trillion won).” .
The European Central Bank (ECB) has expressed concerns about using the proceeds from frozen assets. This is because it can cause instability in the euro.
The extensive Ukraine fund proposed by the EU is designed to provide subsidies worth 50 billion euros (about 71.137 trillion won) to Ukraine by 2027, but it is difficult to implement due to opposition from Hungary.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.