EU proposes to allocate €1 billion from frozen Russian assets for Ukraine’s defense industry

The European Commission proposes to allocate €1 billion from the proceeds of frozen Russian assets to develop the Ukrainian defense industry.

These funds will be part of the second tranche to be provided to strengthen Ukraine’s defense capabilities.

Ukrinform reports that European Commissioner Didier Reynders stated this at a plenary session of the European Parliament dedicated to supporting Ukraine.

The second tranche of funds from the European Union is expected to be €1.5 billion, the same as the previous one, which was allocated in July.

“From the next tranche, which is also expected to be €1.5 billion, we have proposed to allocate 1 billion for the Ukrainian industry,” the European Commissioner said.

He explained that of the €1.5 billion of extraordinary proceeds from frozen Russian assets, 90% of the first tranche was channeled through the European Peace Fund to deliver priority equipment to Ukraine.

The funds were spent on artillery ammunition and air defense equipment, as well as part of direct orders from the Ukrainian defense industry. This amounts to about €400 million.

According to Katarina Mathernova, EU Ambassador to Ukraine, part of this money was spent to pay for the production of Ukrainian-made Bohdana wheeled howitzers.

EU assistance

The European Commissioner reminded that since the beginning of the Russian invasion of Ukraine, the EU had mobilized about €45.5 billion for military support, of which €6.1 billion was channeled through the European Peace Fund. This helps the EU provide Ukraine with a wide range of weapons to repel the Russian invasion.

It is worth recalling that the Central Bank of the Russian Federation’s assets located in the EU were frozen as part of the international sanctions imposed on Russia. This led to the accumulation of profits, which are now being spent to support Ukraine, in accordance with the decision of the Council of the European Union.

EU countries have already transferred 980,000 artillery shells to Ukraine out of the 1 million ammunition promised in March 2023. By the end of the year, EU countries will have supplied a total of more than 1.5 million shells to Ukraine.

In September, Defense Minister Rustem Umierov and European Commission President Ursula von der Leyen opened the EU Office for Defense Innovation.