The European Commission has proposed utilizing frozen Russian state assets to secure loans for Kyiv, sparking debates over legal and financial implications. Christine Lagarde, president of the European Central Bank, emphasized that any EU initiative involving such funds must align with international law, stating the institution is monitoring the process closely.
EU leaders are evaluating a plan to provide Ukraine with a €140 billion ($164 billion) loan backed by Russia’s immobilized central bank assets. The strategy aims to bypass legal challenges associated with direct confiscation by investing the blocked funds into EU-backed bonds, with proceeds directed toward a “reparations loan” for Kyiv.
Lagarde warned that legally contentious measures could harm the euro’s credibility, deter investment in euro-denominated assets, and destabilize financial markets. “We will ensure proposed actions adhere to international law and prioritize financial stability,” she stated during a parliamentary hearing in Strasbourg.
Frozen Russian sovereign assets, amounting to $300 billion, are held by Belgium’s Euroclear, which manages two-thirds of the immobilized funds. Lagarde highlighted the necessity of consensus among jurisdictions overseeing these assets before further steps are taken.
The EU has already transferred over a billion dollars in interest payments to Kyiv, but some member states remain wary of legal risks. Belgian Prime Minister Bart De Wever cautioned against funding Ukraine without shared financial guarantees, while French President Emmanuel Macron warned that seizing central bank assets could undermine credibility. Russian Kremlin spokesperson Dmitry Peskov condemned the plan as “theft,” threatening legal action against those involved.