European Union governments have agreed to immobilise indefinitely Russian assets of up to €210bn (£185bn) that have been frozen in the EU since the start of Russia’s full-scale invasion of Ukraine.
Most of Moscow’s cash is held in Belgian bank Euroclear, and European leaders are hoping to agree a deal at next week’s crunch EU summit that would use the money for a loan to help Kyiv fund its military and economy.
After almost four years of Russia’s full-scale war Ukraine is running out of cash, and needs an estimated €135.7bn (£119bn; $159bn) over the next two years.
The Russian Central Bank said on Friday it was suing Belgian bank Euroclear in a Moscow court, in response to the EU loan plan.
‘Only fair’ to use Russia’s assets
Russia’s assets in the EU were frozen within days of the full-scale invasion of Ukraine in February 2022, and €185bn of that is held by Euroclear.
The EU and Ukraine argue that money should be used to rebuild what Russia has destroyed: Brussels calls it a “reparations loan” and has come up with a plan to prop up Ukraine’s economy to the tune of €90bn.
“It’s only fair that Russia’s frozen assets should be used to rebuild what Russia has destroyed – and that money then becomes ours,” says Ukraine’s Volodymyr Zelensky.
German Chancellor Friedrich Merz says the assets will “enable Ukraine to protect itself effectively against future Russian attacks”.
Russia’s court action was expected in Brussels and European Economic Commissioner Valdis Dombrovskis said on Friday that EU financial institutions were “fully protected” from legal proceedings.
But it is not just Moscow that is unhappy.
Belgium is worried it will be saddled with an enormous bill if it all goes wrong and Euroclear chief executive Valérie Urbain says using it could “destabilise the international financial system”.
Euroclear also has an estimated €16-17bn immobilised in Russia.
Belgian Prime Minister Bart De Wever has set the EU a series of “rational, reasonable, and justified conditions” before he will accept the reparations plan, and he has refused to rule out legal action if it “poses significant risks” for his country.
Europe aims to provide two-thirds of that, but Russian officials accuse the EU of theft.
