Canada sends $1.7 billion to Ukraine, backed by frozen Russian assets

Canada has provided Ukraine with a tranche of approximately $1.7 billion, backed by revenues from frozen Russian assets.

According to Ukrainian Prime Minister Denys Shmyhal, the funds, amounting to 2.5 billion Canadian dollars, will be used to address priority needs within the national budget, Caliber.Az reports via foreign media.

This is the first tranche under Canada's contribution to the G7 ERA (Extraordinary Revenue Acceleration) initiative. Canada has committed a total of 5 billion Canadian dollars for the scheme, which aims to provide Ukraine with financial resources derived from profits generated by frozen Russian assets.

Shmyhal further explained that the G7 ERA initiative is expected to allocate up to $50 billion to Ukraine, with the European Union contributing 20 billion dollars.

Meanwhile, the European Parliament is considering the seizure of Russian assets to support Ukraine, as over €258 billion in frozen Russian funds remain within the EU. This amount exceeds the total financial aid provided by the EU to Ukraine over the course of the war.

The Belgian Securities Depository, Euroclear, is believed to hold the majority of these assets. However, EU member states are divided on how to proceed with their confiscation. Countries like France and Belgium argue that seizing the assets would be illegal, while others, including Baltic States and Poland, are pressing for immediate action.

Although the seizure of the interest on these assets, valued at €3 billion annually, poses minimal risk, some fear that confiscating the assets themselves could undermine investor confidence in the euro. Lawmakers from countries close to Russia, however, argue that international law could justify such a move.

Additionally, some governments see the frozen funds as potential leverage in future peace negotiations, with French President Emmanuel Macron suggesting that they could serve as a security guarantee for Ukraine once the war concludes.

By Aghakazim Guliyev