The European Union's plan to finance Ukraine using frozen Russian assets in Belgium has raised serious concerns among both Belgian authorities and Euroclear, a key financial institution, over possible violations of international law, damage to Europe's financial reputation, and possible countermeasures and retaliation from Moscow.
Guillaume Eliezer, head of risk at Euroclear, said the company remained concerned despite the EU's assurances. Speaking to the French news agency AFP at the company's headquarters in Brussels, he expressed fears of a wider negative effect, saying: "This could signal to international investors that Europe may not be a safe place to invest."
Elije, among other things, questioned whether the system would remain reliable in the long term, especially if there were political changes in EU member states. “Can we be sure that we will still be protected in ten years?” he asked.
The European Commission proposed last week that 210 billion euros of Russian foreign assets, blocked in the EU under sanctions, be used to finance a loan to Kiev, initially in the amount of 90 billion euros, which would be paid out over the next two years.
Under the proposed plan, Euroclear would lend the money to the European Union, which would then pass it on to Kiev. European Council President Antonio Costa said on Tuesday that the EU was very close to a solution for financing Ukraine in 2026 and 2027 that would have the support of at least a qualified majority of member states. A decision is expected at a summit on December 18.
Belgium, home to Euroclear, which holds 185 billion euros in Russian assets, has opposed the loan proposal, citing legal and financial risks. It fears it could be left exposed to legal claims from Russia if sanctions are unexpectedly lifted and is seeking firm guarantees that other member states will agree to be jointly and severally liable and share the costs of any legal action against it or Euroclear.
Belgium, among other things, has proposed that the EU also include 25 billion euros of Russian assets held in other member states, including France, but that proposal has not yet received support.
European Commission President Ursula von der Leyen said that "almost all" of Belgium's requirements regarding the reparation loan have been met.
Elije stressed that Euroclear feels singled out in this initiative, which exposes it to potential hostility from Russia, including cyberattacks. “We monitor the threat level daily,” he said, adding: “Protecting our staff is a priority.”
Additional concerns concern the risk that the loan arrangement could be perceived as a confiscation of Russian assets, which would undermine investor confidence in the eurozone economy.
European Central Bank President Christine Lagarde said yesterday that the latest version of the European Union's proposal for financial support for Ukraine is the most closely aligned with international law so far.
"The scheme that has been established and will be discussed at the next European Council meeting... is the closest I have seen so far to being in line with the principles of international law," Lagarde said at an event organized by the Financial Times.
Lagarde, who has no direct role in the process, has long expressed concerns about the use of Russian assets and said it was important to the ECB that any outcome be in line with international law, as otherwise the global reputation of the euro could be damaged. “This is a very, very exceptional case and it does not take away Russia’s ownership of these assets,” Lagarde said of the current proposal.
Lagarde also said that the EU must explain what is happening and make it clear that the bloc does not resort to the practice of confiscating state assets just because it suits its interests.
One of Russia's most powerful bankers, Andrei Kostin, said earlier this month that Moscow would retaliate if the EU used frozen Russian state assets to lend to Ukraine. He warned that Russia could launch a decades-long legal battle over the money, Reuters reported.
While Brussels is looking for a way to use the proceeds from frozen Russian assets to finance Ukraine with the least risk, the experience of recent years shows that Russia is ready to use international treaties and arbitration to challenge European measures. This is why Belgium's warnings that it could face lengthy lawsuits, financial shocks and even retaliation against Euroclear gain additional weight, writes the French "Mond".
The newspaper points out that in a report published on Tuesday, a coalition of European NGOs, including the Veblen Institute for Economic Reform, warned that “Russian oligarchs and other investors have multiplied their arbitration proceedings against the EU.” According to their estimate, at least 41 billion euros are being sought from the EU and its allies (Great Britain, Ukraine and Canada) as compensation for sanctions - a minimum estimate, since in most of the 24 identified proceedings the amounts of compensation claims have not been made public.
After having their villas, yachts and works of art seized following Russia's invasion of Ukraine, numerous oligarchs have fought back with lawsuits, sometimes successfully, Le Monde reports. In 2024, Pyotr Aven and Mikhail Fridman won a case before the EU court, which ruled that their contribution to the Russian war effort was "too indirect" to justify sanctions imposed against them.
In addition to this high-profile case, Russian oligarchs and companies have launched more discreet actions, relying on investment treaties that many European countries signed with the Soviet Union in the late 1980s.
Fridman, for example, has used a 1989 agreement between Luxembourg and Russia to seek the return of his assets frozen in the EU country, as well as financial compensation for “irreparable and catastrophic damage” to his business. He is seeking 14,5 billion euros, half of Luxembourg’s annual budget.
Russian-Armenian billionaire Samvel Karapetyan recently sued France after authorities seized his villa on the Cote d'Azur as part of a money laundering investigation, basing his claim on a 1995 investment agreement between France and Armenia.
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