EU Sends First $1.6 Billion From Frozen Russian Assets to Ukraine as Kremlin Vows to Retaliate

Ursula von der Leyen addresses the media during a press conference in Strasbourg, France, on July 18, 2024. (Johannes Simon/Getty Images)

European Union officials said Friday that the first tranche of money from frozen Russian assets have been sent to support Ukraine as it resists Moscow’s invasion, while the Kremlin threatened to retaliate against what it calls theft of its sovereign property.

European Commission president Ursula von der Leyen announced on July 26 that $1.6 billion of the interest the European Union has made from holding some $225 billion in frozen Russian central bank assets has been made available to Ukraine, as Kyiv pleads for more Western aid.

“The EU stands with Ukraine,“ Ms. von der Leyen said. ”Today we transfer 1.5 billion euros in proceeds from immobilised Russian assets to the defence and reconstruction of Ukraine. There is no better symbol or use for the Kremlin’s money than to make Ukraine and all of Europe a safer place to live.”

The EU’s 27 member states agreed in May to use the interest earned on the hundreds of billions of dollars of frozen Russian assets to provide military support to Ukraine and for reconstruction of the war-torn country. The money was seized as part of several packages of sanctions against Moscow in response to its invasion.

EU officials have estimated that the interest from the frozen assets, most of which are held in Belgium, could amount to roughly $3 billion per year.

The European Commission said that, under the plan adopted in May, 90 percent of the proceeds from frozen Russian assets would be used for military aid to Ukraine through the European Peace Facility, while 10 percent would go toward reconstruction and other support efforts through the EU budget.

While there was no official acknowledgement on Kyiv’s part of what is the first tranche of the promised proceeds from the frozen Russian assets, Mykhailo Podolyak, adviser to Ukraine President Volodymyr Zelenskyy, posted a statement on social media that mentioned the need to use “financial tools” to punish Russia and to obtain weapons that would “deprive the aggressor of a number of capabilities.”

“In order to destroy the infrastructure of the war, we need to increase the amount of resources that [Russia] is losing due to its continuation,” he wrote, while calling for improvements to Ukraine’s air defense system in order to deliver tactical defeats to Russia along the front line and force Moscow to the negotiating table.

The Kremlin, for its part, voiced opposition to the EU announcement that the proceeds from the frozen Russian central bank assets was being used to help Ukraine in the war.

Kremlin spokesman Dmitry Peskov told reporters on Friday that the EU’s move was “illegal” and that Russia would take “well-thought-out actions” in response.

“Such steps by the European Commission will not remain unanswered,” he said.