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Ukraine presses West to spend all frozen Russian assets on reconstruction, not just the interest

Ukrainian President Volodomyr Zelensky speaking in an interview during the Reuters NEXT conference. (Ukrainian government photo)

Ukraine has told its allies that it needs all frozen Russian assets, and not just the interest on those assets, or it won't likely receive enough funding to pay for reconstruction of the country, Reuters reported.

Ukrainian Deputy Justice Minister Iryna Mudra told the news agency in an interview that it sees "no alternatives" to the politically and legally tricky measure of giving it all the Russian assets that Western nations have frozen as part of their sanctions for the invasion of Ukraine.

"Any alternatives, no matter how sincere and noble they are, generate insufficient funds and can be solely as an intermediate and fast enough option to collect several billions for the immediate needs of Ukraine's reconstruction," Mudra said.

Negotiations to use all the Russian assets, which are thought to total about $300 billion, including more than $200 billion in European nations, have stumbled over warnings from the International Monetary Fund and others that it could stir fears among other nations that their funds held by Western institutions aren't safe.

A World Bank report released in March puts the cost of Ukraine's recovery and rebuilding from Russia's invasion at $411 billion over the next decade. An update to the report is expected early next year and it will likely show the cost has risen sharply.

As an alternative to use the Russian funds themselves, plans have so far centered on the profits, taxes and interest they generate. Last month, for example, Belgium, which holds most of the assets, announced it will create an $1.8 billion fund for Ukraine using tax on profits generated by Russian assets frozen after the start of the war.

Last month, European leaders called on the European Council to come up with proposals to help pay for the reconstruction of Ukraine with seized Russian assets, and Russian officials soon threatened to retaliate if they do so.

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