(Bloomberg) -- 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.

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 ($282 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.

Bolstering Defenses

EU efforts to bolster its defenses after years of underspending are growing urgent amid warnings that Russia could look to target NATO allies after its war on Ukraine and amid doubts about the US commitment to European security, especially if Donald Trump wins another term in the White House.  

Europe does “not have control of elections or decisions in other parts of the world,” von der Leyen said. “With or without the support of our partners, we cannot let Russia win.”

The commission chief stressed the importance of supporting the bloc’s defense industry and reiterated her support for establishing a post for a designated defense commissioner if she wins a second term after EU elections in June. In addition, the EU will open an office for defense innovation in Kyiv, she said, allowing the bloc to learn from Ukraine’s battlefield experience and expertise in military innovation. 

Von der Leyen earlier this month made boosting the EU’s defense capability a key focus of her bid for a second mandate to lead the commission.

A plan to purchase ammunition outside of Europe gained momentum at a leaders’ meeting hosted by French President Emmanuel Macron earlier this week. With Russian forces trying to capitalize on Ukraine’s desperate ammunition shortages, allies have been struggling to shore up support — including with a Czech plan to start purchasing artillery shells outside of the EU. 

--With assistance from Katharina Rosskopf and Alberto Nardelli.

(Updates with details on funds in seventh paragraph)

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