{"id":5178,"date":"2024-03-20T20:14:05","date_gmt":"2024-03-20T20:14:05","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/03\/20\/e-u-finds-a-way-to-make-russia-pay-for-weapons-for-ukraine\/"},"modified":"2024-03-20T20:14:05","modified_gmt":"2024-03-20T20:14:05","slug":"e-u-finds-a-way-to-make-russia-pay-for-weapons-for-ukraine","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/03\/20\/e-u-finds-a-way-to-make-russia-pay-for-weapons-for-ukraine\/","title":{"rendered":"E.U. Finds a Way to Make Russia Pay for Weapons for Ukraine"},"content":{"rendered":"<div style=\"text-align:center\"><img loading=\"lazy\" decoding=\"async\" width=\"1050\" height=\"550\" src=\"https:\/\/i2.wp.com\/static01.nyt.com\/images\/2024\/03\/20\/multimedia\/20eu-frozen-assets-1-mplq\/20eu-frozen-assets-1-mplq-facebookJumbo.jpg?resize=1050,550&amp;ssl=1\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"E.U. Finds a Way to Make Russia Pay for Weapons for Ukraine\" title=\"E.U. Finds a Way to Make Russia Pay for Weapons for Ukraine\" \/><\/div><p> <br \/>\n<\/p>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Under tremendous pressure to come up with billions of dollars to support Ukraine\u2019s military and backfill its members\u2019 own dwindling arsenals, the European Union said Wednesday that it had devised a legal way to use frozen Russian assets to help arm Ukraine, just as it was considering other mechanisms to bolster its defense industries.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The developments are an important milestone, with U.S. funding for Ukraine remaining stuck in Congress and Ukraine\u2019s defenses sagging as shortages of ammunition, artillery shells and missiles force battlefield rationing.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Though the E.U. is looking at a number of different ways to find cash for defense purchases, they all face hurdles.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The goal to \u201cmake Russia pay\u201d for Ukraine\u2019s arsenal and for its reconstruction has made for a popular slogan among the allies, but parlaying it into actual policy has proved difficult, largely because of legal concerns around liquidating Russian state assets frozen under sanctions.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Now, following months of political wrangling, the European Commission, the E.U. executive branch, has found a way to use the profits from those frozen Russian assets for Ukraine\u2019s benefit, with most if it going to military support for Ukraine.<\/p>\n<h3 class=\"css-15h6bi9 e1gnsphs0\" id=\"link-6a546beb\"><span>How the plan will work<\/span><\/h3>\n<p class=\"css-at9mc1 evys1bk0\">Set for approval by E.U. leaders meeting in Brussels on Thursday, the plan could provide Ukraine with up to 3 billion euros, or about $3.25 billion, a year, or as much as 15 billion euros ($16.3 billion) from 2023 to 2027, depending on market conditions. The first payment to Kyiv could be made as soon as July, the commission said on Wednesday.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">After Russia\u2019s invasion of Ukraine more than two years ago, Western nations took the unusual step of freezing more than $330 billion in Russian central bank assets held overseas. The bulk of them \u2014 over $217 billion \u2014 is in the European Union. With payments to Russia blocked by sanctions, Moscow has been unable to access those assets, sell them or benefit from interest earned on them.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">As such, cash generated from the assets has remained stuck overseas, with a vast majority held in Belgium by Euroclear, a financial services company. Under the E.U. plan, 97 percent of profits generated by those assets as of Feb. 15 would go to Ukraine. Companies like Euroclear would retain 3 percent to fund ongoing and future litigation by Russia trying to claw back its assets and revenues.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">This year, 90 percent of that windfall would go to funding weapons for Ukraine, the commission said, with the rest reserved for the bloc\u2019s fund for the reconstruction of Ukraine.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">\u201cThe Russians will not be very happy,\u201d Josep Borrell Fontelles, the<span class=\"css-8l6xbc evw5hdy0\">  <\/span>top E.U. diplomat said this week. The amount of money, he added, \u201cis not extraordinary, but it is not negligible.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">An earlier version of this plan <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2023\/07\/28\/world\/europe\/ukraine-russia-assets.html\" title=\"\">was delayed twice in the course of 2023<\/a> over disagreements among member states and<span class=\"css-8l6xbc evw5hdy0\">  <\/span>European Central Bank concerns. The bank, the Eurozone\u2019s version of the U.S. Federal Reserve, warned that using assets from another country\u2019s central bank could harm Europe\u2019s reputation as a safe place to store money, which could harm the bloc\u2019s aspiration to increase the international use of its common currency, the euro.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">As Mr. Borrell had predicted, the Russians were outraged about the proposal. \u201cThis is outright banditry and theft,\u201d said the Russian Foreign Ministry\u2019s spokeswoman, Maria Zakharova, on Thursday, Russia\u2019s TASS news agency reported.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">The Kremlin spokesman, Dmitri Peskov, was more restrained. \u201cThe Europeans are perfectly aware of the damage that such decisions may cause both to their economy and to their image, their reputation as reliable guarantors of inviolability of property,\u201d Tass quoted him saying.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<h3 class=\"css-15h6bi9 e1gnsphs0\" id=\"link-65976960\"><span>How else can the E.U. raise money for the war and weaponry?<\/span><\/h3>\n<p class=\"css-at9mc1 evys1bk0\">The revenues from the frozen Russian assets are a start, but the E.U. will need billions more to continue supporting Ukraine and bolster its own defense, particularly with the looming possibility of a complete rupture in American aid to Ukraine under a Trump presidency.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Arsenals across the bloc\u2019s 27 members have been depleted after two years of weapons and ammunition transfers to Ukraine. Just as important, the European defense industry says it needs more certainty and upfront investment before it can ramp up production.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Building an integrated military industry is new territory for the European Union, which from its inception has been primarily an economic and trade alliance.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">But the need for Europeans to invest in defense has grown more urgent after recent remarks<span class=\"css-8l6xbc evw5hdy0\">  <\/span>by former President Donald J. Trump, the presumptive Republican presidential nominee. He <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2024\/02\/11\/us\/politics\/trump-nato.html\" title=\"\">said last month<\/a> that he would oppose NATO\u2019s defense of European members who underpaid toward the alliance\u2019s joint defense needs, and <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2024\/02\/10\/us\/politics\/trump-nato-russia.html\" title=\"\">that he would \u201cencourage\u201d Russia<\/a> to \u201cdo whatever the hell they want\u201d in Europe.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Europeans took note. \u201cFor decades, Europe has not invested enough in its security and defense,\u201d said Charles Michel, the president of the European Council, which sets policy priorities, in a letter to the E.U. leaders meeting in Brussels Thursday. \u201cNow that we are facing the biggest security threat since the Second World War, it is high time we take radical and concrete steps to be defense-ready and put the E.U.\u2019s economy on a \u201cwar footing.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">\u201cThis means spending more, and buying more jointly, thus more efficiently,\u201d he added. \u201cWe must also help the defense industry access private and public funds.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">At the Thursday summit, E.U. leaders will discuss the idea of having the bloc\u2019s development and climate bank, the European Investment Bank, venture into defense purchases \u2014 a major shift in its strategy and purpose from climate change and green energy, highlighting the urgency felt across the E.U. to bolster military capabilities.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Some E.U. nations would like the bloc to jointly issue bonds to raise cheap funding for defense. But this is not popular among the richer E.U. nations, most notably Germany. The bloc also maintains the European Peace Facility, an off-budget pot of money that it has been slowly tapped for defense purchases for Ukraine. France wants this fund to pay only for made-in-Europe equipment, which is seen as a major limitation given that the European defense industry says it\u2019s unable to produce enough quickly to satisfy growing needs.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Meanwhile, E.U. countries operating outside E.U. strictures and structures have been able to act faster to support Ukraine, underscoring the bloc\u2019s rigidities. The Czech Republic has been leading a buyers\u2019 group with other E.U. allies and has already secured 300,000 shells for Ukraine as its stockpiles run dangerously low.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Biden administration officials have made frequent trips to Europe to discuss using Russian assets to aid Ukraine. At a<a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2024\/02\/28\/business\/russia-ukraine-frozen-assets.html\" title=\"\"> gathering of finance ministers in Brazil<\/a> last month, Treasury Secretary Janet L. Yellen said that seizing assets outright was a possibility and suggested that there was a legal justification for doing so.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">But the meeting was marred by divisions among the policymakers. Some, such as the French finance minister Bruno Le Maire, argued that taking Russian central bank assets directly would violate international law.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div>\n<div class=\"css-53u6y8\">\n<p class=\"css-798hid etfikam0\">Eshe Nelson<!-- --> contributed reporting from Frankfurt, and <!-- -->Alan Rappeport<!-- --> from Washington.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Under tremendous pressure to come up with billions of dollars to support Ukraine\u2019s military and backfill its members\u2019 own dwindling arsenals, the European Union said Wednesday that it had devised a legal way to use frozen Russian assets to help arm Ukraine, just as it was considering other mechanisms to bolster its defense industries. The [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5179,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","fifu_image_url":"https:\/\/static01.nyt.com\/images\/2024\/03\/20\/multimedia\/20eu-frozen-assets-1-mplq\/20eu-frozen-assets-1-mplq-facebookJumbo.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[8657,2302,795,202,1130,4120],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/5178"}],"collection":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/comments?post=5178"}],"version-history":[{"count":1,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/5178\/revisions"}],"predecessor-version":[{"id":5180,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/5178\/revisions\/5180"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media\/5179"}],"wp:attachment":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media?parent=5178"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/categories?post=5178"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/tags?post=5178"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}