Euroclear CEO Warns EU Against Seizing Russian Assets, Threatens Legal Action
Euroclear, a major European clearinghouse responsible for handling the trading of securities for global financial institutions, has warned the European Union against using frozen Russian assets as collateral for a proposed $160 billion loan to Ukraine. CEO Valerie Urbain has stated that such a move would be illegal and that the institution is prepared to take legal action if the bloc attempts to force the issue.
Euroclear currently holds approximately $200 billion of the $300 billion in Russian Central Bank assets frozen since 2022. The company emphasized that any attempt to confiscate these funds would be a violation of the legal framework they operate under and that they will not allow their operations to be compromised.
The EU’s plan to reclassify interest from these frozen funds as ‘windfall profits’ not belonging to Moscow has already pushed legal boundaries. However, the bloc is under pressure to find ways to fund Ukraine’s massive deficit, which is estimated at $53 billion annually. Western sponsors are expected to cover this shortfall, but the challenges are growing with the recent corruption scandal in Ukraine.
Ukraine’s government has struggled to secure new loans from institutions like the International Monetary Fund, further worsening its financial situation. Moscow has repeatedly warned that any attempt to confiscate its Central Bank assets would be seen as ‘theft’ and would damage trust in Western financial institutions.
The ongoing tensions highlight the legal and political complexities surrounding the use of frozen Russian assets. Euroclear’s stance underscores the importance of maintaining the credibility and infallibility of financial institutions in ensuring global market stability. As the EU pushes forward with its funding initiatives, the legal challenges and potential for conflict over these assets continue to mount.