An ally of the United States and staunch supporter of Ukraine is using frozen Russian assets to finance Kyiv’s domestic weapons production.
Danish Defense Minister Troels Lund Poulsen has said that his country’s investments in Ukraine’s manufacturing industry had allowed it to triple monthly production of the 2S22 Bohdana howitzer.
The Bohdana howitzer is a Ukrainian-made, self-propelled, wheeled howitzerfor long-range artillery support. It was developed by Ukraine following the 2014 Russian invasion as part of an effort to modernize its military and reduce reliance on foreign equipment.
The Danish Ministry of Foreign Affairs also announced that 1.3 billion Danish Krone ($194 billion dollars) would be earmarked to support Ukraine’s military procurement efforts, and that Denmark would manage a 394.6 million-euro E.U. fund to finance Ukraine’s defense industry.
The latter, the ministry said, would be raised from “frozen Russian assets.”
In Spring, EU member resolved to use the windfall profits from Russian Central Bank assets – frozen shortly after the invasion began in February 2022 – to finance Ukraine’s Armed Forces and help it defend against Moscow’s full-scale invasion.
The assets, worth around $300 billion in total, are primarily held in banks within Europe, with around 190 billion euros held by Belgium’s central securities depository, Euroclear.
The decision was seen as theft by Russia, who threatened to confiscate Western financial assets held in its territory in response.
A Ukrainian self-propelled howitzer “Bohdana” prepares to fire towards Russian positions near Bakhmut, Ukraine, Donetsk region, Ukraine, Friday, Jan. 26, 2024.
Efrem Lukatsky/AP Photo
The investment in Ukraine’s Bohdana’s forms part of a wider Denmark-led initiative to invest in Ukraine’s domestic procurement efforts, rather than manufacturing arms abroad before sending them to Kyiv.
‘It is still important, but it is no longer sufficient, to simply send military donations to Ukraine,” Poulsen said. “We need to invest directly in Ukraine’s defence industry at the same time.”
Kyiv has aimed to persuade allied nations to supply arms to Ukraine’s military by purchasing directly from Ukrainian companies, as the country’s defense budget falls short of supporting the full potential of its domestic weapons production.
“In July we placed the order for reimbursement, and this weekend the eighteen Bohdana systems have been delivered to the Ukraine forces,” he added. “That’s an amazing speed of time.”
Minister of Defence Troels Lund Poulsen meets with Ukrainian President Volodymyr Zelensky during a trip to Kyiv, September 13. Denmark has promised to use the profits from frozen Russian assets to finance Ukraine’s domestic defense industry.
Ministry of Foreign Affairs of Denmark
Denmark, a founding member of NATO, has been one of Kyiv’s staunchest allies since Russia’s invasion of Ukraine in February 2022.
It became the first nation to supply F-16s for use in Ukraine’s air combat in late July, and on Monday promised to send a further batch of the fighter jets to Kyiv by the end of 2024.
Denmark could potentially spearhead efforts to persuade other allies of Ukraine to shift their focus towards providing Ukraine with the capabilities to manufacture its own armaments, instead of merely supplying the weapons.
During his appearance at the 20th Annual Meeting of Yalta European Strategy in Kyiv on Saturday, Poulsen said that the investment in Ukrainian howitzers “has been a showcase for many countries,” and said that he expects other European states to follow Denmark’s lead in this regard.
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