MEPs debate on the use of Russian frozen assets to support Ukraine’s victory and reconstruction during the plenary session. Opening statements by Josep BORRELL FONTELLES, High Representative of the Union for Foreign Affairs and Security Policy and Vice-President of the European Commission. This transcription is a result of an automatic process. Please check against delivery.

EU - Ukraine (T)

statement

Strasbourg

debate

plenary session

EU - Russia (T)

BORRELL FONTELLES, Josep (PSE, ES, EC)

solidarity with Ukraine (T)

The use of Russian frozen assets to support Ukraine’s victory and reconstruction: Opening statements by Josep BORRELL FONTELLES, High Representative of the Union for Foreign Affairs and Security Policy and Vice-President of the European Commission

SOUNDBITE (English), Josep BORRELL FONTELLES, HR/VP, Dear President. As we have been speaking about the situation in Gaza, in other parts of the world, the Ukraine continues its courageous self-defence against Russia's aggression. There are at least we have good news, at least from my point of view, when the US Congress have finally finished an agreement. This was very timely because in the meantime Russia is escalating its bombardment against Ukrainian towns and civilians, against thermal power plants, even against dams, flouting basic international rules and standards.

SOUNDBITE (English), Josep BORRELL FONTELLES, HR/VP, The news from the front line are also worrying. The US support package will also boost the morale of courageous Ukrainian defenders. We know that the next week will be difficult. But perhaps more dangerous even for Ukraine and European security. Especially we Europeans, we can and we must do more. We can and we must do more because it is a matter of European strategic responsibility. When we talk about a strategic responsibility, it means that we have to take our part because there is no business as usual in Europe.

SOUNDBITE (English), Josep BORRELL FONTELLES, HR/VP, Since the war started in February 2022, we have done a lot, but I am sure that we can do more and quicker. We have to be more audacious. We have also failed to plan for the midterm. We have always been looking 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.

SOUNDBITE (English), Josep BORRELL FONTELLES, HR/VP, Putin will try to subjugate the freedom of Ukrainian people. And maybe go beyond Ukraine. Well, at least that's what the propagandist and some Russian leaders say all the time. So our policy 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 started, nobody could expected it to last two years. For Putin, the plan was only a couple of weeks.

SOUNDBITE (English), Josep BORRELL FONTELLES, HR/VP, 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 the 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, who is fighting for our values and their security, will require unprecedented actions. It will require more boldness. And the topics of today is one example.

SOUNDBITE (English), Josep BORRELL FONTELLES, HR/VP, At the beginning of the foolish scale invasion, we immobilise together with our G7 and members and other partners the assets of the Russian Central Bank. We mobilised these assets. These assets are today being managed by the central securities depositories and generate extraordinary revenues. Because their 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 immediate needs of Ukrainian to defend itself.

SOUNDBITE (English), Josep BORRELL FONTELLES, HR/VP, 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 steps adopted by the Council in February, we introduce 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.

SOUNDBITE (English), Josep BORRELL FONTELLES, HR/VP, This mechanism could provide approximately €3 billion annually. And in addition, we increase the legal certainty by making clear that these revenues don't belong to Russia since they are not sovereign assets, but make clear difference between the capital and the revenues. I am talking about the revenues, and now we are advancing with the next step and multi-role as High Representative, which are entitled by the Treaty to make proposals to the Council.

SOUNDBITE (English), Josep BORRELL FONTELLES, HR/VP, I propose 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 needs weapons and ammunition to defend itself and its people against Russia's missiles, drones, bombs and constant attacks. We initially envisaged to use these revenues to support Ukraine's recovery and reconstruction, but I think that before thinking on reconstruction, we have to think about avoiding destruction.

SOUNDBITE (Spanish), Josep BORRELL FONTELLES, HR/VP, Before we've rebuilt, we need to stop the destruction. If there's less destruction, less to be rebuild. I just want to say in the Donetsk region, which is partially occupied by Russia where there is daily pressure from the army, the cities that have been wiped from the map. They've been absolutely wiped from the map, boggled and others. Over a hundred thousand residential structures have been destroyed. That's why I've suggested to the Council that 90% of the revenue is used on increasing military support to Ukraine to stop further destruction. We'll do this via the European Peace Facility.

SOUNDBITE (Spanish), Josep BORRELL FONTELLES, HR/VP, As you know, this has been used from the very beginning of the war to provide military support to Ukraine. The remaining 10% will be allocated to the budget for reconstruction and measures to support the defence industry. As you know, we cannot use the EU budget to purchase arms and that's why we built the European Peace Facility, which is not a part of the European budget. It's an intergovernmental fund, so it doesn't have that limitation. Secondly, I want to repeat the fact that this initiative only and exclusively refers to the use of the revenue, revenue generated by the frozen assets. It's not the assets themselves. It's not the actual capital, but it's the revenue, which is being produced by that capital.

SOUNDBITE (Spanish), Josep BORRELL FONTELLES, HR/VP, There could be other actions that could be taken, but for the time being, we think this is something which is legally sustainable. As such, we can use this revenue and allocate them, as I've said before, 90% to the European Peace Facility and 10% to the EU budget.

SOUNDBITE (Spanish), Josep BORRELL FONTELLES, HR/VP, Now, finally, this initiative has been taken in coordination with other states of the G7. We've been working with our international partners. This proposal has been taken to the Council via a council decision proposal. Proposed by myself. And that's something I can do in line with the Treaties. There's also a Council regulation, which companies it. So the overarching proposal from the Commissioner myself, is two parts. So we can look at how this decision can be adopted by the Council and then it can be applied. The Council is discussing this now. I hope that will be a swift discussion. We need these resources to continue supporting Ukraine at a decisive moment in Russia's aggression. Thank you very much.