The EU’s new defense industry strategy envisages using Russian assets to finance Ukraine’s defense industry.

The EC has presented a legislative proposal regarding the European Defense Industry Program (EDIP), which would allow for future financing of support for Ukraine’s defense-industrial complex at the expense of profits from the frozen assets of the Russian Federation.

EDIP will ensure the transition from short-term emergency measures adopted in 2023, ending in 2025, to a more structured and long-term approach and the achievement of military-industrial readiness. EDIP will mobilize €1.5B from the EU budget during fiscal years 2025-2027 to further increase the competitiveness of the European defensive technological and industrial base.

It is assumed that the EDIP budget will also strengthen the EU’s military-industrial cooperation with Ukraine and support the development of its military-industrial and technological base. For this purpose, EDIP can receive additional financing from the profits of immobilized Russian assets (subject to the adoption of a decision by the Council of the EU).

Russian assets on Euroclear’s balance sheet brought €3.25B in profit in 2023; this year, the profit will reach a similar level.