The European Commission has resumed work on possible ways to seize frozen Russian central bank assets held in Europe, according to a new report by the Financial Times. One option under discussion would create a separate entity to hold about €200 billion in frozen Russian assets, most of which are currently held by the Belgian securities depository Euroclear.
In late August, four EU countries sent a letter to the European Commission urging it to return to the task of developing options for using Russian assets to benefit Ukraine. Politico reported that Germany is now leading the group of countries pushing for a solution to the question of the Russian funds.
The Financial Times said the renewed debate over frozen Russian assets has been driven by Ukraine’s rising defense costs and discussions over the shape of the EU’s next long-term budget for 2028 to 2034.
European officials say the main challenge is to develop a proposal acceptable to Belgium, which has previously blocked initiatives of this kind. Belgian authorities are concerned that if the assets are used to support Ukraine, Russia could sue, leaving Brussels exposed to the legal consequences.
According to the Financial Times, Belgian officials insist that “any proposal involving the immobilized Russian assets must provide a complete and legally watertight solution covering both the assets and the liabilities of Euroclear and of the Belgian State.”
One option under discussion is a joint proposal put forward by former German Defense Minister Annegret Kramp-Karrenbauer and Nathalie Loiseau, a French member of the European Parliament from President Emmanuel Macron’s political camp. They suggest creating a separate EU structure that could take custody of the Russian funds currently held at Euroclear. Some European officials believe such an approach could provide Belgium with the necessary guarantees against legal risks.
Sweden, the Netherlands, Spain, and Poland had earlier called on the European Commission to resume work on finding ways to use Russian central bank assets for Ukraine’s benefit. In a letter to EU foreign policy chief Kaja Kallas, they wrote:
“Ukraine needs more financial support in both the short and long term…By using the immobilised assets, the EU can ensure that Russia pays for the destruction it has caused in Ukraine without delay, while at the same time reducing the burden on our own taxpayers.”
Politico reported that Germany is now leading the group of countries pushing for a rapid solution.
Among the proposals under discussion is a new loan for Ukraine backed by the frozen Russian assets.
