Brussels and Moscow are at odds after the EU chief, Ursula Von der Leyen, hinted at freezing Russian foreign assets and mobilising them for Ukraine.
Leyen said Brussels is initiating a plan to use €170 billion of Russia’s frozen sovereign assets to back “reparation loans” for Ukraine, as the EU is facing growing pressure to find ways to fund Kyiv after the US cut its financial support.
The decision to use Russian assets has faced severe Russian backlash, as Moscow says it would constitute a theft and that Moscow would respond with all-out measures against it, risking another escalation. After Russia and Ukraine went to war in 2022, the bloc froze some estimated $300 billion in Russian funds, some €200 billion of which is held by Brussels-based clearinghouse Euroclear.
These frozen funds, since then, have accrued billions in interest, which the West is funnelling into Ukraine to support its war against Russia.
Meanwhile, the EU chief wants to go further and aims to repay Ukrainian loans which Kyiv has taken during the war against Russia. The decision that Moscow says will have consequences on the battlefield. Brussels has argued that the system would provide Kyiv with immediate financial support while sidestepping formal or full seizure.
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It simply means that the EU is planning to counter Russia with its own money earned from foreign assets, though the plan, while it seems quite interesting and well-balanced, faced backlash from certain countries within the bloc.
The plans have already received objections from France, Germany and Belgium, who warned that the move would undermine the confidence of investing nations in the future. They also said that an EU commissioner "cannot independently announce such measures, aimed at jeopardising the safety and security of other nations.
According to a US note circulated among G7 capitals and cited by several outlets, members were urged to consider seizing the sovereign assets principal “innovatively” to fund Ukraine. Moscow warned that any attempt to use the assets “will not go unanswered.”
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