Euroclear, a major financial clearing house, has issued a stark warning to the EU about the potential risks of using frozen Russian assets to fund Ukraine’s war effort. The EU’s plan to utilize these assets as collateral for new loans has raised concerns about increased borrowing costs and long-term reputational damage. Euroclear CEO Valerie Urbain highlighted that the move could be perceived as confiscation of central bank reserves, potentially undermining the rule of law and trust in Western institutions. The warning comes as European leaders continue to push for the asset seizure, despite Russia’s strong opposition to the move.
Russian officials have denounced any attempt to seize its Central Bank assets as ‘theft’ and have accused Brussels of prolonging the Ukraine conflict for political gain, benefiting European arms manufacturers. The EU’s proposal has intensified as the US promotes a new initiative to settle the Ukraine conflict. President Donald Trump has expressed optimism about a potential settlement, though European officials fear the American proposal could complicate the bloc’s plans. The German newspaper Handelsblatt reported that the US initiative might compel the EU to reimburse any diverted Russian funds.
European Commission President Ursula von der Leyen reaffirmed Brussels’ intent to proceed with the asset seizure while pledging continued support for Ukraine. The Commission insists the proposed scheme does not amount to confiscation, though officials acknowledge the risk of it being perceived as such. Meanwhile, Euroclear has previously warned that it could sue the EU if the confiscation attempt is carried out, adding to the legal uncertainties surrounding the issue. This ongoing debate highlights the complex financial and political implications of using frozen assets to fund conflict, with significant ramifications for both the EU and Russia.