Ukraine looks to seize interest on Russia’s frozen assets as Kyiv scrambles for wartime funds – DIGIWIZ CENTRAL

Ukraine looks to seize interest on Russia’s frozen assets as Kyiv scrambles for wartime funds

A Ukrainian tank during firing practice process at special shooting range near the frontline in Zaporizhzhia, Ukraine on March 29, 2023.

Muhammed Enes Yildirim/Anadolu Agency via Getty Images

Ukraine is looking to seize interest accrued from Russia’s frozen assets, the Wall Street Journal said.
Currently, these are controlled by clearinghouses such as Euroclear, which collected $1.7 billion in the year’s first half.
Kyiv is facing a budget deficit of more than $40 billion in 2024 as its forces continue to press a counteroffensive.

Ukraine is reportedly looking to seize interest accrued on frozen Russian assets as it scrambles to raise more wartime funds.

Kyiv is facing a budget deficit of more than $40 billion for 2024, while security spending is set to increase to $45 billion. 

According to The Wall Street Journal, one source of much-needed funding could come from the Russian assets that were frozen by Western institutions soon after Moscow’s 2022 invasion.

While directly seizing the hundreds of billions of dollars in Russia’s foreign exchange reserves and gold deposits has run into legal doubts, the interest they have accrued is another matter.

The interest has been sitting in clearinghouses that hold the Russian funds, such as Euroclear. In the first half of the year, the Belgium-based firm collected $1.7 billion in interest on $150 billion in Russian assets. It also incurred $22 million in costs related to the sanctions.

Euroclear is in talks with the European Union to send some of that money to Ukraine by way of a windfall tax paid to the European Commission, sources told the WSJ, with one proposal allowing Euroclear to keep a portion of the funds.

Euroclear did not immediately respond to Insider for comment and declined to comment to the WSJ.

Meanwhile, Ukraine has also been receiving funds from Europe and the US. In addition, Kyiv has tapped its bond market, borrowing $10 billion via local sales this year as high yields of around 10% have attracted the country’s private sector.

Looking beyond the war, Ukraine needs $411 billion to rebuild itself, according to World Bank estimates.

Read the original article on Business Insider
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