UK, Europe mobilize billions for Ukraine using frozen Russian assets

The UK government has announced a £2.26 billion ($2.93 billion) war loan, leveraging profits from frozen Russian assets to finance military procurement. This commitment, made on October 22, 2024, marks the UK as the first G7 nation to contribute to the newly established Extraordinary Revenue Acceleration (ERA) mechanism.

Ukrainian President Volodymyr Zelenskyy welcomed the funding, which is crucial as Ukrainian forces continue to face challenges on the battlefield. “Turning the proceeds of Putin’s corrupt regime against that regime and putting it in the hands of Ukrainians” is imperative, asserted UK Secretary of State for Defence John Healey during a parliamentary address.

As Ukraine grapples with marginal Russian advances in the Donbas and a loss of territory in the Kursk region, increased military spending will enhance the nation’s resilience heading into the winter. The UK government emphasized that this funding round is separate from existing support packages, including £3 billion per year in bilateral military assistance and the £3.5 billion Defence Industrial Treaty signed in July.

Since the onset of the conflict, the UK has pledged £12.8 billion to Ukraine, comprising £7.8 billion in military support and £5 billion in non-military aid as of October 21.

### Europe Joins the Effort

On the same day, the European Parliament approved a loan of up to €35 billion ($37.7 billion) under the Ukraine Loan Cooperation Mechanism. This loan forms part of the broader $50 billion G7 package, capitalizing on the profits from immobilized Russian assets. Notably, the EU’s contribution will come from profits accrued from frozen Russian Central Bank assets, with Kyiv granted discretion on fund allocation.

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While the UK was the first to act under the ERA, France has also joined the effort. On September 6, the French Armed Forces Ministry announced it would allocate €1.4 billion from frozen Russian assets, specifically for the swift acquisition of military equipment for Ukraine. Initial orders will include ammunition, artillery, and air defense systems worth €300 million throughout 2024.

### A Strained Russian War Economy

In his parliamentary address, Healey outlined staggering Russian losses since the war began: 3,400 tanks, 8,500 armored vehicles, 26 vessels, and 675,000 troop casualties. These figures, however, differ from Ukrainian estimates, which claim losses of 9,000 tanks and up to 700,000 personnel. Despite the discrepancies, the data illustrates the heavy toll on Russia’s war capabilities.

As Russian artillery continues to outpace Ukraine’s by at least three to one, the Kremlin’s military budget is set to increase significantly, accounting for one-third of the total government budget next year. Without sustained allied support and a concerted effort to strip Russia of its financial resources, the UK government warns that Russia could have access to over $400 billion more for its war efforts, potentially prolonging its invasion for another four years.

The collaborative efforts of the UK and EU signal a determined response to bolster Ukraine’s resilience in the ongoing conflict, showcasing a unified stance against Russian aggression.