Imagine holding billions of dollars in frozen assets, but not knowing what will happen if they’re taken away. That’s exactly the challenge facing Euroclear, a Belgium-based financial giant that’s sitting on nearly €197 billion ($213 billion) of Russian assets frozen under EU sanctions. These assets, belonging to Russia’s central bank, have sparked intense debate across Europe about whether they should be confiscated to help Ukraine – but Euroclear is sounding the alarm.
Here’s where it gets interesting: While these frozen funds aren’t being touched directly, they’re still earning massive amounts of interest – €5.15 billion in just the first nine months of this year. The EU has already started funneling some of this money to Ukraine, but the idea of seizing the assets themselves has set off a storm of warnings, risks, and accusations of theft.
Euroclear’s Big Fear
Euroclear’s CEO, Valerie Urbain, dropped a bombshell during an interview with Bloomberg. She warned that if the EU decides to confiscate these assets and hand them to Ukraine, it would also need to take on the full responsibility for what happens next.
Her concern is simple but powerful: “What happens if Russia comes back years later, demanding its money or securities? If the assets are gone, who will pay them back?” Urbain insists that if the EU takes this step, it must take both the assets and the liabilities. In other words, if Russia ever demands repayment, it shouldn’t fall on Euroclear.
The Money is Already Moving
Even without confiscating the core assets, money is already flowing. In July, Euroclear made a €1.55 billion ($1.63 billion) payment to the EU’s Ukraine fund – just from the interest the Russian assets have earned. The EU plans to keep using these interest payments to support Ukraine, with a €1.5 billion tranche already announced, and in October, the European Parliament approved a €35 billion loan to Ukraine that will eventually be repaid with revenues from these frozen funds.
The US has also joined the effort, transferring $20 billion to Ukraine as part of a G7 agreement to provide up to $50 billion in financial support. But there’s a twist: with President-elect Donald Trump threatening to cut US aid to Ukraine, the EU might be forced to revisit the risky idea of seizing the assets outright.
Why the Stakes Are So High
Confiscating Russia’s billions sounds like a tempting solution, but experts warn it could create a financial earthquake. Urbain argues it could threaten the euro’s reputation as a global reserve currency, which would have serious consequences for Europe’s financial stability. Christine Lagarde, the president of the European Central Bank, has echoed this warning.
The risks aren’t just economic. Russia has accused the West of outright theft, calling these moves illegal and unjust. Meanwhile, Ukrainian President Volodymyr Zelensky continues to push for the funds, arguing that $30 billion from the frozen assets would be enough to “fully cover Ukraine’s skies” with defense systems.
A Growing Divide
Tensions reached a boiling point this week when a delegation from the European Parliament traveled to Kiev to discuss financial aid. The head of the delegation, Iratxe Garcia, urged EU leaders to create a legal plan for using the €200 billion of frozen Russian assets to rebuild Ukraine and supply weapons. But there’s no consensus yet – and the stakes keep rising.
As the debate rages on, one thing is clear: the question of what to do with Russia’s frozen billions isn’t just about money. It’s a test of international law, financial stability, and Europe’s unity in the face of a global crisis. The world is watching to see who will pay the ultimate price in this high-stakes standoff.
