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Anders Åslund is a senior fellow at the Stockholm Free World Forum and adjunct professor at Georgetown University. Daniel Fried is a distinguished fellow at the Atlantic Council and a former U.S. assistant secretary of state. Kurt Volker is a distinguished fellow at the Center for European Policy Analysis and former U.S. ambassador to NATO and special representative for Ukraine negotiations.
Two months after pledging to shape a legal framework that would give Ukraine the interest earned on frozen Russian assets, the EU still hasn’t taken the necessary steps to make this a reality. And time is running out on Ukraine’s finances.
At their June Summit in Apulia, Italy, G7 leaders — including European Commission President von der Leyen — promised to provide Ukraine a vital lifeline: “We decided to make available approximately $50 billion leveraging the extraordinary revenues of the immobilized Russian sovereign assets … by the end of the year.”
This was the main decision G7 leaders made at their summit. And to enable it, the EU was to adopt a law prolonging the freezing of sovereign Russian assets until Moscow had paid for its war against Ukraine in full. This would guarantee the frozen assets would continue to be available to produce the interest needed in order to repay the $50 billion advanced to Ukraine.
The decision itself was a creative compromise. The U.S., Canada and the U.K. would have preferred seizing not just the interest but all $300 billion as well. However, in the absence of consensus, this solution was approved by heads of state and government.
The decision was still meaningful and important for Ukraine — $50 billion roughly accounts for the country’s annual budget shortfall, and under the G7 formula, this would be made up for without burdening EU or U.S. taxpayers. Moreover, codifying a legal framework for seizing the interest and putting a mechanism in place to monitor the use of funds would provide “proof of concept” for the future — for example, if there were to be an agreement to seize and use the principal of the frozen assets as reparations.
But EU implementation is now stuck. None of the bloc’s big players — not German Chancellor Olaf Scholz, French President Emmanuel Macron or even von der Leyen herself — have jumped in to get implementation moving.
And without EU legislation, the U.S. is stuck as well. Until the bloc provides the legal framework, the U.S. can’t view its financing as a loan backed up by real resources. Instead, it would be viewed as an expenditure and thus require Congressional appropriation. And as anyone who watched Washington struggle with its military assistance package for Ukraine earlier this year knows, that simply wouldn’t happen fast enough — if at all.
So, why exactly is the EU stuck? The most obvious reason for delay is simple bureaucratic inertia in the wake of the European Parliament election. There have also been summer vacations, while Brussels is locked in negotiations about forming a new Commission. But all this amounts to the bloc fiddling while Kyiv burns.
Certainly, von der Leyen is in the midst of complicated talks with the national governments of member countries in order to form the new Commission. There are always political trade-offs with such talks, and perhaps it seems easier to agree on portfolios without adding the Russian asset issue to the mix. But this isn’t a compelling excuse, as it has zero impact on European taxpayers. Furthermore, if the funds aren’t used, the only feasible financial replacement for Kyiv would, in fact, come from EU and member country budgets.
Of course, we acknowledge that there are reasonable and growing concerns over governance in Kyiv, as well as any possible monitoring mechanisms to ensure the provided funds are used appropriately. Such funds should under no circumstances fall subject to, or contribute, to corruption. But this is a technical problem that can be overcome with oversight mechanisms — not a reason for inaction.
We’re more than halfway through the third year of Russia’s full-scale war now, and Ukraine has shown remarkable resilience, determination, ingenuity and effectiveness. The past few weeks have even seen a shift in momentum as Ukraine has brought the war inside Russian territory, attacking oil refineries, airfields and other military infrastructure, forcing Russia to significantly curtail military activities in Crimea.
The West now needs to match Ukraine’s ingenuity and steadfastness by providing the promised $50 billion as quickly as possible. None of the reasons behind the bloc’s inaction stand up to scrutiny — especially given the EU’s vital interest in ensuring Ukraine’s success.
There can be no more delay. When the EU holds its next Council meeting tomorrow, it will be time to take action.
