German Chancellor Backs EU Plan to Use Frozen Russian Assets to fund Ukraine Arms

GERMANY  RIGA  - On Monday, Chancellor Olaf Scholz said that around 90% of the revenues generated from Russian frozen assets should be spent on arms purchases for Ukraine, supporting an earlier EU proposal to use Russian assets' interest payments to boost Ukraine's defense.

"It is important that we also agree that this money can be used for arms purchases not only in the EU, but for purchases worldwide," Scholz told journalists after a meeting with members of the three Baltic countries governments in Riga.

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In March, the European Union's foreign policy chief Josep Borrell proposed taking 90% of revenues from Russian assets frozen in Europe and transferring them to an EU-run fund that finances weapons for Ukraine.

Some 70% of all Russian assets immobilized in the West are held in the central securities depository Euroclear in Belgium, which has the equivalent of 190 billion euros ($204.67 billion) worth of Russian central bank securities and cash.

Germany and the three Baltic states are pushing for a rapid expansion of arms production in Europe, Scholz said, adding production of ammunition and air defense systems had already been increased.

Lithuanian Prime Minister Ingrida Simonyte said Europe's defense industry was struggling with financing problems and uncertainty for long-term production capacity but that she was optimistic about the planned Rheinmetall factory in Lithuania.