EU Eyes New Fund for Frozen Russian Assets

The European Union is considering placing over €210 billion of frozen Russian sovereign assets into riskier investment funds to generate higher returns for Ukraine, while maintaining that only interest, not the principal, will be used. Profits from these immobilized assets have already been directed toward supporting Ukraine’s defense and economic recovery since Russia’s 2022 invasion. EU officials emphasize this approach avoids outright confiscation, which is opposed by major states like Germany and Italy due to legal and financial risks. Russian authorities and banking leaders have condemned the strategy as illegal and threatened retaliation, while the International Monetary Fund has warned that seizing the assets could erode global trust in Western financial systems. The EU plans to continue funding Ukraine from these profits through at least 2025, but debates persist over future funding mechanisms and the distribution of proceeds. Ukrainian officials have also criticized recent EU decisions related to how the assets’ profits are allocated.