As EU leaders convene in Brussels this week for a critical summit, the bloc remains divided over whether to escalate support for Ukraine by leveraging frozen Russian central bank assets. With over 210 billion euros ($246 billion) immobilized in the EU—primarily held by Euroclear—the debate centers on balancing Ukraine's urgent needs against legal and financial risks.
Why the Hesitation?
Since 2022, the EU has tapped interest from these assets, generating 3 billion euros annually. Last year, G7 nations agreed to a $50 billion loan backed by these proceeds. However, proposals to access the principal face resistance due to fears of violating international law and destabilizing financial markets. European Central Bank President Christine Lagarde has warned that confiscating assets could erode trust in the euro as a reserve currency.
Retaliation Risks Loom
Russia's recent lawsuit against Euroclear underscores concerns about reciprocal actions, such as seizing Western assets in Russia. Analysts warn this could trigger capital flight from Europe and harm businesses with Russian exposure. "The legal and political stakes are immense," said Fabian Zuleeg of the European Policy Center. "But Ukraine's mounting needs make this debate unavoidable."
Divisions Within the Bloc
Hungary and Slovakia oppose using the assets, citing escalation risks, while Belgium fears disproportionate liability for Euroclear. The U.S. has reportedly urged Italy and others to reject the plan. Conversely, European Council President Antonio Costa and Commission President Ursula von der Leyen advocate for a unified approach, linking asset freezes to post-conflict compensation for Ukraine.
The summit concludes Friday, with leaders expected to extend asset freezes but defer decisions on principal confiscation—a delay reflecting Europe's precarious balancing act in 2025.
