The European Union should directly use $300 billion in frozen Russian assets to finance the reconstruction of war-torn Ukraine, says Kaja Kallas, the candidate for the top EU foreign policy position.
Kallas, a former Estonian prime minister who has been nominated as the EU’s high representative, said member states should abandon their reservations about directly seizing assets, citing Kyiv’s “legitimate claims” to the funds after the Russian attack.
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“We recognize that Russia has legitimate claims against us because we have their assets. But Ukraine also has legitimate claims against Russia because they are destroying Ukraine every day,” Kallas said
She hinted that Russia might have the opportunity to “reclaim” assets as part of the settlement, but added: “Given what’s going on, I doubt there’s anything left.”
To taxpayers who don’t want EU member states to pay for Ukraine’s reconstruction, Kallas said: “We shouldn’t do that. Those who are destroying Ukraine will pay for it.”
Kallas said Estonia’s initiative to send 0.25 percent of its gross domestic product to Ukraine should be adopted by other member states.
She also said that EU sanctions against Russia should not be renewed every six months and should be permanent until the 27 member states decide to lift them. “It would be better if the situation was reversed,” Kallas said.
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This year, the G7 reached an agreement to seize profits from Russia’s frozen assets. However, the plan does not include confiscation. Some countries considered the potential legal implications of such a move and the risk to the euro, while others, including the US and UK, advocated bolder options such as outright asset confiscation.
Ukrainian President Volodymyr Zelensky said Ukraine knows how to handle Russia’s frozen assets. He proposed handing over the entire $300 billion to Kyiv. “Frankly, this is Ukrainian money,” he said.
The World Bank estimates that Ukraine’s total economic, social and other monetary losses from the war will be $499 billion by the end of 2023.
I assume the way how the numbers are presented in the article is a bit misleading. A World Bank statement from March 2024 (pdf) says:
So I would say the number 486bn is the sum needed for reconstruction over the next 10 years as per the assessment made at end of 2023, while in 2024 Ukraine needs additional money to keep the economy running, manage transport, debris, etc. You’ll see a diagram on the linked pdf.
But this is what I interpret from this World Bank paper, I am not sure.