During the meeting of European Union (EU) Economic and Financial Affairs Council (ECOFIN) meeting in Brussels, Latvia together with Estonia, Lithuania and Slovakia presented a joint announcement, in which they propose confiscating the arrested assets owned by Russian officials and other persons that are under western sanctions and divert the money towards Ukraine’s reconstruction.
Since the start of Russia’s invasion of Ukraine, Latvia has done all it could to support Ukraine, providing financial, humanitarian and military aid to the country. The EU has also significantly increased financial, emergency aid and humanitarian aid. As a result of active warfare in Ukraine, the country’s agriculture and industrial production output has either ceased or has been significantly damaged. Tax revenue goes down every day, and the situation is made even worse by the illegal misappropriation of assets and export goods, as well as sever infrastructure damages. Losses of life and infrastructure are catastrophic. This has severely limited the country’s options to ensure uninterrupted function of state services and social services.
According to estimates from the International Monetary Fund, Ukraine’s payment deficit will be approximately EUR 14.3 billion by June.
Considerable financial resources will be necessary to restore Ukraine after the war, BNN was told by Ministry of Finance.
EU and its allies have imposed sanctions against Russian institutions, businesses and private persons, freezing their assets. To restore Ukraine using the ‘aggressor pays’ approach, Latvia, together with Lithuania, Estonia and Slovakia have come up with a proposal for European Commission to evaluate legal options to have the frozen funds confiscated and diverted towards the reconstruction of Ukraine.
Additionally, countries are invited to keep the assets that are not possible to be confiscated frozen until Russia has fully compensated Ukraine all the damages caused by the war.