Ukraine can hope for new military aid worth billions from the EU in its defense against Russia. At the start of a summit in Brussels, Chancellor Olaf Scholz and other heads of state and government signaled support for plans to use interest income from frozen Russian central bank assets to buy weapons for Ukraine. This year alone, up to three billion euros could be raised.

Scholz said in Brussels that he expected unity on the issue. The money should be used primarily to “acquire the weapons, acquire the ammunition that Ukraine needs for its defensive struggle.” Ukrainian President Volodymyr Zelenskyj called for quick decisions in a speech broadcast via video conference. He criticized the fact that Europe is falling short of its potential when it comes to supplying artillery ammunition. He also asked, among other things, for more air defense systems. It’s not about hundreds, but about an achievable number, said Zelensky.

Message to Putin

In a draft of the final declaration of the summit that ends this Friday, it was said that the provision of all necessary military aid would be accelerated. The EU will continue to support Ukraine “for as long as necessary and as intensively as necessary.” Scholz said: “It is still important that we counter the brutal Russian attack by supporting Ukraine.”

The Chancellor once again urged the other EU member states to provide even more military aid. “All European states must make a good contribution. I see noticeable progress there,” he said. He once again pointed out that Germany is Ukraine’s largest supporter in the EU, with weapons delivered or already promised worth 28 billion euros.

Conflict between Scholz and Macron is on hold

Scholz described the decision at the Paris Ukraine summit at the end of February to purchase weapons and ammunition on a large scale outside the EU as a “big breakthrough”. After this summit, however, there was also an open conflict between Scholz and French President Emmanuel Macron.

Macron had not ruled out the use of ground troops in Ukraine in the future. A day later, Scholz countered this and promised that he would not send any German soldiers to Ukraine and that NATO would not take part in the war. At the end of last week, Scholz and Macron met with Polish Prime Minister Donald Tusk in Berlin to calm things down and send a sign of unity. The controversial issue of ground troops was simply ignored.

Estonia is promoting a 0.25 percent target

Estonian Prime Minister Kaja Kallas called for a uniform target for military aid at the EU summit. If every country allocated at least 0.25 percent of its gross domestic product to military aid, Ukrainians could trump Russia, she said. However, an agreement on this is currently considered impossible.

According to figures from the Kiel Institute for the World Economy (IfW Kiel), countries such as France, Italy and Spain would then have to increase their spending dramatically, as they are currently well below the 0.25 percent mark with a rate of around 0.07 percent. Germany was recently at around 0.6 percent.

Russian money is intended to indirectly arm Ukraine

Borrell and EU Commission chief Ursula von der Leyen submitted the proposal for the indirect use of Russian funds for Ukraine to the governments of the EU states on Wednesday shortly before the summit. Specifically, it stipulates that 90 percent of the usable interest income from the custody of Russian funds should be channeled into the EU fund for financing military equipment and training. The remaining 10 percent would then flow into the EU budget and be used to strengthen the defense industry in Ukraine itself.

According to the Commission, around 210 billion euros from the Russian central bank have been frozen in the EU. The Brussels-based financial institution Euroclear recently announced that it had earned around 4.4 billion euros in interest income in 2023. It is still unclear when the first funds could be used for Ukraine. Austria’s Chancellor Karl Nehammer made it clear that his country had hoped that the money would only be invested in the reconstruction of Ukraine. For neutral states like Austria, it must be ensured that they do not participate in the supply of weapons and ammunition through their consent. In the Commission’s view, this problem will be solved by only spending part of the money on weapons and ammunition.

Warnings from Moscow

EU officials also emphasize that the project is only about revenue that Euroclear is making unscheduled because of EU sanctions against the Russian central bank. For the time being, no expropriation in the true sense is planned.

One reason for this is legal concerns and likely retaliation. Moscow had already warned the EU last year not to confiscate the property of the Russian state or Russian citizens. It would be conceivable, for example, that companies operating in Russia from EU countries would also be forcibly expropriated. In addition, direct use of Russian assets could also lead to other states and investors losing trust in the European financial center and withdrawing assets from the EU.

In his video address, Zelensky indirectly called on the EU not to worry about this. It would be appropriate to use both the profits and the assets themselves to stop Russian terror, he said. Russia must be aware of the real costs of war and the need for a just peace. Ukrainian Deputy Prime Minister Oleksandr Kubrakov recently estimated the war damage caused by Russia at 500 billion euros, citing current figures from the World Bank, the European Union and the United Nations.