Debate: The use of Russian frozen assets to support Ukraine’s victory and reconstruction
Date: TUESDAY, 23 APRIL 2024
Speaker: Josep Borrell Fontelles
Language: EN

We have to be more audacious. We have also failed to plan for the midterm. We have always looked at the curve of the latest Russia escalation against Ukraine before we take our own decisions. And I said several times, and I have to repeat today in the last session of this Parliament. Unhappily, this is a war of attrition. And Putin will continue this war to conquer as much as Ukraine as he can. So it’s not going to finish soon.  Putin will try to subjugate the freedom of Ukrainian people. And maybe go beyond Ukraine. Well, at least that’s what the propagandists and some Russian leaders say all the time. So our policies for this war have been many times ad hoc. And now we have to put them in a more stable and more sustainable footing in order to support Ukraine in the long term. When they got started, nobody could expected it to last two years. For Putin, the plan was only a couple of weeks. Two years later, we are in a situation that he could never have imagined. We have to think deeper. We have to prepare ourselves for a war that will require our efforts, our commitment, our actions. You have to continue supporting Ukraine, but not only by words and not only for tomorrow, and maybe not only for next year. Our commitment to support Ukraine, which is fighting for our values and their security, will require unprecedented actions. It will require more boldness. And the topics of today are one example.  At the beginning of the full-scale invasion, we immobilised, together with our G7 members and other partners, the assets of the Russian Central Bank. We immobilised these assets. These assets are today being managed by the central securities depositories and generate extraordinary revenues. Because the interest rate has increased a lot. So this capital is providing much bigger revenues. After long discussions, after studying carefully, the rule of law that can be used in order to assess what we can do and what we should not do. We reached the conclusion that these extraordinary revenues could be used to support the immediate needs of Ukraine to defend itself. And how to do that? Well, I have to confess that this has been an unchartered territory and we need to innovate. We decided to pursue the goal of using these revenues for the support of Ukraine, with a stepwise approach. In the first step, adopted by the Council in February, we introduced rules for the central security depositories that generate these revenues, to keep them aside, to identify them, to keep them aside and account for them separately. And these revenues, now they are on separate accrual accounts. We expect this mechanism could provide approximately EUR 3 billion annually. And in addition, we increase the legal certainty by making clear that this revenue does not belong to Russia, since they are not sovereign assets, but make a clear difference between the capital and the revenues. I am talking about the revenues and now we are advancing with the next step.  A month ago, as High Representative, who is entitled by the Treaty to make proposals to the Council, I proposed to the Council to use these revenues to support Ukraine with military means through our European peace facility. And in order for you to clarify which was my proposal as High Representative, supported by the Commission through a Council regulation, I want to stress three main points here. First, Ukraine urgently need weapons and ammunition to defend itself and its people against Russian missiles, drones, glide bombs and constant attack. We initially envisaged to use these revenues to support Ukraine’s recovery and reconstruction, but I think that before thinking about reconstruction, we have to think about avoiding destruction.   – para evitar más destrucción. Lo haremos a través del Fondo Europeo de Apoyo a la Paz, que —como ustedes saben— ha sido utilizado desde el principio de la guerra para apoyar a Ucrania con ayuda militar. El otro 10 % será asignado al presupuesto de la Unión para medidas de reconstrucción y medidas de apoyo a la industria de la defensa, porque —como ustedes saben—, hasta que no haya mejor criterio, el presupuesto de la Unión no puede ser utilizado para comprar armas. Y por eso diseñamos el Fondo Europeo de Apoyo a la Paz, que no es parte del presupuesto de la Unión, sino de un fondo intergubernamental que no está sometido a esta limitación. En segundo lugar, quiero reiterarles que esta iniciativa se refiere única y exclusivamente al uso de las rentas generadas por estos activos inmovilizados, no a los activos en ellos mismos, no al capital, sino a la renta producida por este capital. Podemos pensar otras acciones, pero, de momento, creemos que esto es algo que se sostiene legalmente y que, por lo tanto, podemos coger estos ingresos —estas rentas— y asignarlos como les he dicho antes: 90 % al Fondo Europeo de Apoyo a la Paz y 10 % al presupuesto de la Unión. Finalmente, esta iniciativa ha sido tomada en plena coordinación con los otros Estados del G–7, en cooperación con nuestros socios internacionales. Esta propuesta ha sido elevada al Consejo a través de una propuesta de Decisión del Consejo propuesta por el vicepresidente de la Comisión / alto representante de la Unión para Asuntos Exteriores y Política de Seguridad, que es quien puede hacerlo, de acuerdo con el Tratado. Esta propuesta está acompañada de una propuesta conjunta de la Comisión y de mí mismo para ver de qué manera se puede aplicar esta Decisión si el Consejo la adopta. El Consejo las está discutiendo. Espero que su discusión se acabe pronto porque necesitamos estos recursos para seguir manteniendo nuestra ayuda a Ucrania en un momento decisivo de la agresión de Rusia.