EU to freeze €210bn in Russian assets indefinitely | European Union
The EU has agreed to freeze Russia’s sovereign assets in the bloc indefinitely as Moscow steps up threats to retaliate against Euroclear, the custodian of much of the Kremlin’s dormant money.
The EU’s decision to use emergency powers to immobilize €210bn (£185bn) of the central bank’s assets marks a significant step towards using the cash to help Ukraine defend against Russia.
European Council President António Costa confirmed on Friday that EU leaders have fulfilled their October commitment to “keep Russian assets inactive until Russia ends its war of aggression against Ukraine and compensates for the damage done.”
Before this step, EU sanctions that formed the basis of frozen assets had to be renewed every six months; This created the potential for a Kremlin-friendly government like Hungary to veto this move.
The decision came just hours after Russia’s central bank said it would file a lawsuit against Euroclear, the Brussels central securities depository that holds these assets. The organization, once a little-known part of the international financial apparatus and now in the spotlight, has no say in how the frozen funds are used.
The lawsuit filed in a Moscow court alleges that Euroclear’s “illegal actions” caused “damage” to the central bank’s ability to manage funds and securities.
Euroclear declined to comment, but a spokesman said the company was “currently fighting more than 100 legal claims in Russia.”
Last week, the European Commission offered Ukraine a €90bn (£79bn) loan against Russian assets that have been left dormant in the EU since its full-scale invasion. However, the plan was blocked by Belgium, which feared lawsuits from Moscow and the seizure of Belgian assets in the country.
Belgian prime minister Bart De Wever met Keir Starmer in Downing Street on Friday for long-planned talks on the EU-UK reset, immigration and Russian assets.
De Wever’s spokesman said they discussed “the possible use of the value of immobilized Russian sovereign assets” and “agreed to continue to work closely to make progress on this complex issue.”
A Downing Street spokesman made an almost identical statement, saying: “It was clear, and they agreed, that maintaining economic pressure on Russia and putting Ukraine in the strongest possible position would be the only way to achieve a just and lasting peace.”
The meeting comes ahead of next week’s EU summit, where leaders have promised decisions on funding for Ukraine in 2026-27, amid warnings that Kiev will run out of money next spring to fund its defense and pay doctors and teachers.
EU officials believe the proposed €90 billion loan will cover two-thirds of Ukraine’s financial needs over the next two years, and expect Kiev’s other “international partners” to provide the rest.
The Belgian government says it needs guarantees from its EU partners that it will not face a multibillion-euro bill if Russia sues.
De Wever had previously described the proposal as “fundamentally wrong” and argued it would violate international law and jeopardize the stability of the euro currency.
In a sign of tensions over the plan, Belgium, Bulgaria, Malta and Italy said only EU leaders should decide on the use of immobilized assets. In a statement on Friday announcing support for the emergency powers clause, which would freeze funds indefinitely, it called on EU countries to “continue to explore and discuss alternative options in line with EU and international law”.
Belgium argues that the EU should borrow from capital markets to finance Ukraine in exchange for unallocated funds (headroom) in the EU budget. However, many member states are hesitant to take on more common debt.
Germany, usually a defender of economic orthodoxy, sees the frozen asset plan as the best option and has promised to provide a quarter (€50 billion) of the necessary guarantees for Belgium.
EU officials argue that the legal risk to Euroclear and therefore to Belgium will be limited.
Under the complex plan, the EU would borrow cash from Euroclear, then lend the funds to Ukraine, while Russia would remain the legal owner of the assets. Ukraine would repay the money only if it received compensation from Moscow for the massive damages sustained during the war.
The UK, home to €27bn (£23bn) of frozen Russian assets, supports the idea and expects some, but not all, G7 countries to move forward with a similar plan following a decision on Euroclear assets. The US’s involvement in the program is less certain, but it holds only €4bn (£3.5bn) in dormant assets.
