london — Russia has accused the European Union of “theft” after the bloc transferred the first tranche of profits from frozen Russian assets to Ukraine to boost its military capabilities in the face of Moscow’s invasion. The G7 group of leading industrialized nations plans a similar scheme.

However, there are concerns that the asset schemes could prompt some countries to cut their own bilateral funding to Ukraine, after Germany indicated it could end bilateral military aid for Kyiv after 2025.

The European Union said Friday that it had so far provided around $48 billion in military aid to Ukraine since Russia’s 2022 invasion. The bloc has begun providing military and civilian aid to Ukraine using profits from $300 billion worth of confiscated Russian assets, following an EU agreement struck in May.

“We have mobilized the first tranche of windfall profits from Russian frozen assets. It’s 1.4 billion [euros, or $1.55 billion]. Part of it is going directly to Ukraine in order to boost the Ukrainian defense industry. By March, we will have the second tranche of the windfall profits,” EU foreign affairs chief Josep Borrell told reporters Friday.

Russian anger

Moscow described the transfer of profits from its frozen assets as “theft.”

“These are illegal actions. They will definitely have legal consequences. This is nothing but illegal expropriation — in Russian, theft — of our money, our assets,” Russian presidential spokesman Dmitry Peskov told reporters in a phone call Thursday.

The G7 also agreed in June to use frozen Russian assets to finance a $50 billion loan to provide military aid for Ukraine, although that scheme has yet to be finalized.

Germany indicated this month that it intends to end bilateral military aid for Ukraine from 2026 as it seeks to close a $13 billion budget deficit. Berlin said the G7 asset mechanism could help pay for the shortfall.

Germany is currently Ukraine’s second-biggest bilateral donor, after the United States. The move to end that support has come under widespread criticism, said analyst Liana Fix of the U.S.-based Council on Foreign Relations.

“The political signal that it sends is devastating: that the biggest donor in absolute terms in Europe, Germany, suddenly stops its support for Ukraine, especially as it is unclear when and how exactly this G7 mechanism on the Russian frozen assets will work,” Fix said.

“The idea of the G7 instrument was to communicate to [Russian President] Vladimir Putin that it doesn’t make sense for him to outwait the West, right? That he cannot hope that at some point the West will stop support. And so this is a contradicting sign now — that the moment another financial source has been tapped, suddenly Ukraine funding is cut out of the budget,” Fix told VOA.

Political pressure

Chancellor Olaf Scholz recently insisted Germany would continue to support Kyiv.

“We will support Ukraine as long as it will be necessary and we will be the biggest national supporter of Ukraine in Europe,” Scholz told reporters during a visit to Moldova on August 21.

Amid enduring economic pressures at home, Scholz is facing domestic political difficulties, said Fix.

“Although the foreign policy has not changed, it shows changing priorities. Because before, for the governing coalition, Ukraine support was sacred. Nothing could be changed about that. And it shows how desperate the governing coalition in Berlin is for their political survival, ahead of elections in the autumn in eastern Germany.”

Long-range missiles

Meanwhile, the European Union on Thursday urged member states and Western allies to lift restrictions on Ukraine’s use of long-range missiles to target sites inside Russia.

“The military platform for Russian attacks on Ukrainian cities and infrastructure should not stay off limits for elimination, should not be a sanctuary for Russia attacking Ukraine,” Borrell told reporters.

“To facilitate Ukraine to respond to the Russian aggression inside Russian territory is in accordance with international law. And I don’t see why someone says it is going to war against Moscow. No, we are not going to war with Moscow. We are delivering arms to Ukraine, that’s all,” he added.
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