UK and EU Move Closer to Seizing Russian Assets to Strengthen Defense Funding

The UK and European Union are intensifying discussions on seizing billions in frozen Russian assets to bolster defense spending and increase economic pressure on Moscow ahead of potential peace talks, Bloomberg reported on March 18.

According to the UK Foreign Office, UK Foreign Secretary David Lammy and EU foreign policy chief Kaja Kallas will meet in London on Tuesday to review “innovative initiatives” to strengthen European defense funding and military preparedness.

The talks will focus on how to legally and financially justify confiscating Russian assets, despite opposition from EU members like Belgium and Germany. Critics argue that such a move could violate international law by breaching state immunity and destabilizing the euro.

“It is not the United States that has raised consistent concerns about sovereign assets…it’s actually within Europe,” Lammy told the House of Commons on Monday. However, he suggested that Germany’s new government might be open to reconsidering its stance.

Following Russia’s full-scale invasion of Ukraine in 2022, the EU, G7 nations, and Australia froze approximately $280 billion in Russian central bank assets—most of it held in the Belgium-based clearing house Euroclear. Additionally, sanctions on Russian oligarchs locked down $58 billion in assets, including luxury real estate, yachts, and private jets.

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War in Ukraine

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Another key topic of discussion will be the EU’s proposal to allocate $164 billion in defense spending, allowing member states to purchase weapons from third countries such as the UK, Norway, and Switzerland. The UK would not have to contribute financially, but British defense firms could benefit from European arms contracts.

“It’s vital we upgrade our partnership with the EU and work together to bring an end to this war and deliver security for all of our citizens,” Lammy said in a statement.

Earlier, Ukraine received $1.7 billion from Canada as part of the G7’s Extraordinary Revenue Acceleration (ERA) initiative.

Shmyhal stated that the funds, derived from revenues generated by frozen Russian assets, will be allocated to priority state budget needs.

This is the first tranche from Canada, which has committed five billion Canadian dollars to the ERA program.