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Profits from frozen Russian assets should be used to help buy weapons for Ukraine, European Commission head says

Profits from frozen Russian assets should be used to help buy weapons for Ukraine, European Commission head says
  • Russian assets should be used to buy military supplies for Ukraine, Ursula von der Leyen said.

  • The proposal is part of the rising debate over how to use Moscow's frozen funds.

  • Ukraine's military supplies are being depleted as Russia's offensive picks up.

Russia's frozen assets should be used to purchase badly needed military equipment for Ukraine, European Commission Ursula von der Leyen proposed on Thursday.

"There could be no stronger symbol and no greater use for that money than to make Ukraine and all of Europe a safer place to live," she said in a speech to the European Parliament.

The comment raises yet another recommendation for how to use over $300 billion in Russian reserves frozen by Western states in retaliation for Moscow's invasion of Ukraine two years ago.

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Recent weeks have amplified calls to funnel the assets to Kyiv, as Western financial support for the country has slid. Although the European Union approved $54 billion for Ukraine's budget last month, the deal didn't come without opposition. Meanwhile, partisan bickering in the US has delayed further aid.

At the same time, Ukraine has cautioned that its ammunition stockpile is quickly draining, whereas Russia's offensive is turning increasingly forceful.

While the assets could provide breathing room, their use has drawn disagreement among Group of Seven leaders. Ideas, such as a proposal to seize the frozen reserves as a whole, have especially spurred worries about legal and financial repercussions.

On Tuesday, Treasury Secretary Janet Yellen argued the use of the assets has a "strong international law, economic and moral case," comments that garnered criticism from French Finance Minister Bruno Le Mair.

"This legal basis must be accepted not only by the European countries, not only by the G7 countries, but by all the member states of the world community, and I mean by all the member states of the G20. We should not add any kind of division among the G20 countries," he said on Wednesday, quoted by Reuters.

So far, the EU members have agreed to set aside profits raised by the assets. As to von der Leyen's suggestion, a formal proposal is set to appear in two weeks, a source told the Financial Times.

Moscow has also promised retaliation for any actions targeting the funds. That includes threats of legal challenges, as well as the symmetric use of Western funds frozen in Russia.

Read the original article on Business Insider