Keir Starmer has indicated his support for allowing Ukraine to utilise billions of pounds in frozen Russian assets held in the UK to bolster its defence capabilities. This move comes as discussions intensify regarding the fate of Russian assets immobilised in the wake of the 2022 invasion of Ukraine.
Whitehall sources suggest that government ministers are nearing an agreement to grant Kyiv access to these substantial funds, estimated to be around £8 billion. This initiative forms part of a broader effort that could potentially unlock tens of billions of pounds worth of Russian holdings currently frozen within EU member states.
According to a British official, Starmer briefed Ukrainian President Volodymyr Zelensky on this matter during a recent summit of European leaders held in London.
“He is updating Zelensky on the wider support on offer to Ukraine, including using the value of immobilised Russian assets,” the source stated. “We hope to see movement on that issue soon.”
Currently, the interest generated from approximately £180 billion of Russian assets held in European banks and institutions is already being channelled towards supporting Kyiv’s efforts to counter Russian aggression.
However, the permanent confiscation of Russian assets raises complex legal and ethical considerations.
Concerns and Obstacles
- Precedent: Concerns exist regarding the precedent that such a move could establish.
- Belgium’s Hesitation: Belgium, where a significant portion of these assets are held, has expressed reservations, citing fears of potential retaliatory measures, including legal challenges from the Kremlin.
Starmer is expected to engage in discussions with his Belgian counterpart this week to address these concerns. While the UK is unlikely to act unilaterally without broader European consensus, a British source noted, “Given the sensitivities there is always the danger that things will slip again, but we are encouraged by the direction of travel.”
The Unclear Mechanism and Diverging Opinions
The specific mechanism for granting Ukraine access to these funds remains undefined, with options such as loans under consideration. Furthermore, differing views persist among world leaders regarding the permissible uses of these funds.
- UK’s Stance: Britain is reportedly advocating for the direct use of these assets to finance Ukraine’s ongoing defence efforts. Ministers believe that this could enable Ukraine to sustain its resistance at a time when the war is significantly impacting the Russian economy.
- Alternative Views: Conversely, some leaders propose reserving these funds for the reconstruction of Ukraine following the conflict.
Reports have surfaced indicating frustration with France regarding the alleged “shielding” of approximately £18 billion of Russian assets held within the country.
The Financial Times reported that the French government has not yet disclosed the exact amount of Russian assets held in France, nor their specific locations.
Zelensky recently stated that Ukraine faces a shortfall of approximately £600 million needed to procure US weapons that it had planned to purchase this year with financial assistance from its European allies.
Starmer and Zelensky convened at No. 10 Downing Street alongside French President Emmanuel Macron and German politician Friedrich Merz.
Differing Perspectives on Peace Negotiations
While the allies were keen to acknowledge former US President Donald Trump’s contribution to peace talks, so as not to antagonise the US President, Merz expressed reservations regarding the US’s proposed peace plan, which reportedly entails Ukraine ceding territory to Russia.
“I’m sceptical about some of the details which we are seeing in the documents coming from the US side, but we have to talk about that, that is why we are here,” he said. “This could be a decisive time for all of us, so we are trying to continue our support for Ukraine. Nobody should doubt our support for Ukraine.”
Starmer emphasised the need for “hard-edged security guarantees” for Ukraine. He praised Trump, stating that he had advanced the peace process “the furthest it has been in four years”.
However, prior to the meeting, Starmer stressed that any peace agreement must be “lasting” because “Putin does not respect agreements that don’t have hard-edged security guarantees behind them”.