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Europe needs to ramp up defenses to threats, von der Leyen warns

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Ukraine’s allies should consider using profits from frozen Russian assets to buy weapons for Kyiv, European Commission President Ursula von der Leyen said, warning Europe must prepare for the risk of a wider war, according to Bloomberg.

Speaking to the European Parliament on Wednesday, she urged the European Union to significantly bolster its defense capabilities and urgently ramp up the production of ammunition.

“There could be no greater symbol and no greater use for that money than to make Ukraine and all of Europe a safer place to live,” von der Leyen said in a reference to windfall profits of frozen Russian assets. “Ultimately this is about Europe taking responsibility for its own security.”

US Treasury Secretary Janet Yellen called earlier this week on the world’s largest advanced economies to find a way to “unlock the value” of immobilized Russian assets to help bolster Ukraine’s defense against Russia’s invasion and for long-term reconstruction after the war.

The EU, Group of Seven nations and Australia have frozen about €260 billion in the form of securities and cash, with more than two-thirds of that immobilized in the EU. 

“We need to move fast. The threat of war may not be imminent, but it is not impossible,” von der Leyen said. “The risks of war should not be overblown, but they should be prepared for.”

Von der Leyen’s comments come as the commission, the EU’s executive arm, is due to present its sweeping defense strategy as soon as next week. As Bloomberg reported, the document includes proposals on how to rapidly ramp up the bloc’s defense production and designate joint military projects for EU funding, including on space and air and missile defense.

The EU is slowly making progress on plans to apply a windfall tax to the profits generated by the immobilized funds, the vast majority of which are held by Belgium-based clearing house Euroclear. Last year, the funds enabled profits of €4.4 billion.