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| EU prepares to use £185 BILLION of frozen Russian assets to fund huge loan to Ukraine - sparking immediate response from Putin | |
| 2025-12-15 | |
The move would allow EU leaders to work out at a summit next week how to use the tens of billions of euros in Russian Central Bank assets to underwrite a huge loan to help Ukraine meet its financial and military needs over the next two years. Russia's central bank confirmed on Friday that it has filed a lawsuit in Moscow against Euroclear, the Brussels-based financial services company that holds the bulk of the frozen funds, accusing it of illegally blocking access to Russian state assets since the start of the war in Ukraine. The legal action marks the Kremlin's first concrete retaliation against Brussels as the European Commission pushes ahead with plans to raise £80 billion for Kyiv by borrowing against, or potentially seizing outright, Russian reserves immobilised across the bloc. Most of the frozen funds are held in Belgium by Euroclear. The remainder is spread across other EU jurisdictions. The assets were frozen in 2022 after President Vladimir Putin ordered Russia's full-scale invasion of Ukraine. Under current sanctions rules, the funds are immobilised in six-month intervals, a process that requires unanimous agreement from all 27 EU member states. The European Commission has now proposed using emergency EU powers to lock the assets indefinitely, allowing them to be used as collateral for a long-term loan to Ukraine. Russia's central bank said Euroclear had made it 'impossible to access funds and securities belonging to the Bank of Russia' through what it described as illegal actions, and said it would seek damages equivalent to the value of the blocked assets, frozen securities, and lost investment income. It added that Moscow would pursue 'all available legal and other mechanisms to defend its interests' and would also challenge the EU's actions through international courts in both 'friendly and hostile countries'. Belgium, which hosts Euroclear, has raised concerns about the plan, warning it could be exposed to massive legal claims from Russia. Brussels has asked other EU states to share the legal and financial risks, but that proposal has faced resistance, including from France, whose banks hold a smaller share of the frozen assets. The Russian assets are expected to be held until it ends its war in Ukraine and compensates its neighbour for the damage it has inflicted for almost four years. Putin's officials have already begun exploring retaliatory measures, including the seizure of Western-owned assets inside Russia. Russia has already begun exploring retaliatory measures, including the seizure of Western-owned assets inside Russia. Moscow has frozen nearly £15billion of Western funds held by Euroclear within its borders and has warned that further steps could follow if the EU proceeds. The legal move follows strong warnings issued last week by Dmitry Medvedev, Russia's former president and now deputy chairman of the Security Council, who said any attempt by the EU to seize Russian assets would be viewed as a casus belli, or act justifying war. 'If the crazy European Union does, after all, try to steal Russian assets frozen in Belgium under the guise of a so-called 'reparations loan', Russia may well view this move as tantamount to a casus belli with all the relevant implications for Brussels and individual EU countries,' Medvedev said at the time. Hungarian Prime Minister Viktor Orban - Russian President Vladimir Putin's closest ally in Europe - accused the European Commission, which prepared the decision, 'of systematically raping European law'. Hungary and Slovakia oppose providing more support to Ukraine. Friday's expected decision, based on EU treaty rules allowing the bloc to protect its economic interests in certain emergencies, would prevent the two countries from blocking the sanctions rollover and make it easier to use the assets. Mr Orban said it means 'the rule of law in the European Union comes to an end, and Europe's leaders are placing themselves above the rules'. 'The European Commission is systematically raping European law. It is doing this in order to continue the war in Ukraine, a war that clearly isn't winnable,' he wrote. He said Hungary 'will do everything in its power to restore a lawful order'. In a letter to European Council president Antonio Costa, who will chair the summit starting on December 18, Slovakian Prime Minister Robert Fico said he would refuse to back any move that 'would include covering Ukraine's military expenses for the coming years'. He warned that 'the use of frozen Russian assets could directly jeopardise US peace efforts, which directly count on the use of these resources for the reconstruction of Ukraine'. But the commission says the war has imposed high costs by hiking energy prices and stunting economic growth in the EU, which has already provided nearly 200 billion euros (£175 billion) in support to Ukraine. French Foreign Minister Jean-Noel Barrot described the expected move as 'a major decision that will undoubtedly influence the course of the war and accelerate peace'. 'Because Europeans do not want to let anyone else decide for them ... we have decided to lock those sums (assets) for as long as necessary,' Mr Barrot said on France Info news broadcaster. The decision would also prevent the assets from being used in any way without European approval. A 28-point peace plan drafted by US and Russian envoys stipulated that the EU would release the frozen assets for use by Ukraine, Russia, and the United States. That plan was rejected by Ukraine and its backers in Europe. In a separate statement, the Central Bank also described wider EU plans to use Russian assets to aid Ukraine as 'illegal, contrary to international law,' arguing that they violated 'the principles of sovereign immunity of assets.' Western governments froze roughly Russian reserves following the invasion of Ukraine, but until now have limited their use to interest generated by the funds. While Washington has expressed reservations about outright confiscation, preferring alternative funding mechanisms, European officials argue the plan is essential to sustaining Ukraine's defence and ensuring Europe retains influence in any future peace talks. The dispute comes amid growing security tensions between Russia and Europe. NATO secretary-general Mark Rutte warned this week that Russia, with its economy increasingly geared towards war, could be capable of military action against the alliance within five years. 'We are Russia's next target,' Rutte said in a speech in Berlin. 'Too many don't feel the urgency.' | |
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