Europe directs profits from frozen Russian assets to fund arms for Ukraine, says EC VP

“About €1.4 billion have already been allocated through the European Peace Fund for the delivery of priority weapons to Ukraine, including artillery shells and air defense systems, as well as - for the first time - for the purchase of goods produced by the Ukrainian defense industry," he said, adding that most of the weapons should be delivered by the end of the year.

In addition, EU member states have trained 60,000 Ukrainian soldiers and plan to train another 15,000 by the end of winter 2025. 

Dombrovskis also mentioned that the EU has fulfilled 70% of its plan to supply Kyiv with 1 million artillery shells.

This follows an earlier report by the Financial Times on Sep. 16 that the EU is preparing to provide Ukraine with up to €40 billion in new loans by the end of the year, regardless of U.S. involvement, after a G7 plan to use frozen Russian assets to aid Kyiv fell through.

G7 plans for frozen Russian assets

For several months, Ukraine's Western allies have discussed how to use proceeds from approximately $280 billion in frozen assets from Russia’s central bank, most of which are held in Europe. The revenue from these assets is estimated at €3 to €5 billion per year.

At the end of May 2024, U.S. Treasury Secretary Janet Yellen suggested that G7 countries could provide Ukraine with a multi-billion-dollar loan, using interest earned on $300 billion in frozen Russian state assets.

In early June 2024, U.S. Assistant Treasury Secretary for International Finance Brent Neiman stated that Washington, along with G7 partners, was making progress in providing Ukraine with aid funded by profits from Russian assets.

Reuters reported that the U.S. was urging the U.K., Canada, France, Germany, Italy, and Japan to provide Ukraine with a loan secured by income from frozen assets, amounting to up to $50 billion in the short term.

On June 12, the Élysée Palace confirmed that G7 leaders had reached an agreement to provide Ukraine with $50 billion from frozen Russian assets.