Europe wants to use €200 billion of Russian assets as peace guarantee for Ukraine - FT
Photo: Russian assets are to be used as a guarantee of a peace deal (Getty Images)
Europe's biggest powers are exploring the possibility of confiscating over 200 billion euros of frozen Russian assets as they draw up plans for a ceasefire agreement in Ukraine, Financial Times reports.
France and Germany, which have long opposed full-scale confiscation of assets held in the EU, are discussing how they might use them with Britain and other countries.
French officials have discussed a proposal that European capitals seize assets if Moscow violates a future ceasefire agreement in Ukraine, three people briefed on the talks said, as part of efforts to provide Kyiv with post-war security guarantees.
Supporters of the ceasefire see it as a way to force Russia to abide by any agreement and provide Kyiv with guarantees.
The talks come amid a flurry of European diplomatic efforts led by France and the United Kingdom to develop a peace plan for Ukraine, prompted by US President Donald Trump's decision to begin bilateral talks with Moscow aimed at ending the war.
Use of assets
The G7 allies froze about €300 billion in assets of the Central Bank of Russia in 2022 after Russia's full-scale invasion of Ukraine, of which the vast majority - about €190 billion - is held in the Belgian central securities depository Euroclear, and smaller amounts in France, the United Kingdom, Japan, Switzerland, and the United States.
Currently, the income generated from these assets, mostly cash and government bonds, is being used to repay the G7 countries' $50 billion loan to Ukraine, but the underlying assets are not being touched.
Countries including Ukraine, Poland, and the Baltic states have long pushed for the seizure of underlying assets, but key capitals including Berlin, Paris, and Brussels have previously opposed it out of concern that seizing state property would set a precedent under international law.
The European Central Bank was also concerned that the euro's status as a safe option for foreign exchange reserves would be jeopardized. Most assets are denominated in euros.
Peace talks
During his talks with Trump last week, French President Emmanuel Macron said that an immediate seizure of assets would not be respecting international law, but that the money could be part of negotiations to end the war.
Possible future German Chancellor Friedrich Merz has made it clear that he would consider supporting a proposal to seize frozen Russian assets, a source familiar with the situation said. Merz is speaking with acting Chancellor Olaf Scholz to coordinate positions before the March 6 EU leaders' summit.
On March 3, UK Prime Minister Sir Keir Starmer said that London was looking into how the assets could be used. “Obviously the proceeds and profits are being used,” he told MPs, speaking after signing an agreement with Volodymyr Zelenskyy, Ukraine's president, over the weekend for a £2.26 billion loan to Ukraine secured by profits from sanctioned Russian sovereign assets.
“On the [underlying] assets themselves, it’s a very complicated issue. It’s not straightforward,” Starmer added. “But I do think we need to do more, and we are doing more work to look at what the possibilities are at least, along with other countries.”
Two of the people familiar with the French proposal said it had been well received by other European allies, but that it was far from agreed upon.
The pro-arrest camp has received a boost from the Trump administration's threat to end military support for Ukraine. “More and more countries are willing to use [frozen asset seizure] as leverage” one source said.
Western countries froze Russian assets after Russia's full-scale invasion of Ukraine in February 2022.
Most of the money is in Europe. In particular, the amount of frozen Russian assets in the Euroclear depository (Belgium) is 183 billion euros. Ukraine will receive another tranche of €2 billion in March 2025 from the proceeds of these assets. In 2024, interest on cash balances on assets under sanctions against Russia amounted to approximately EUR 6.9 billion.
In addition, the G7 countries will use future profits to provide a $50 billion loan to Ukraine. Kyiv has already started receiving this money. However, there is no consensus in Europe on the confiscation of Russian money because of fears of the consequences for the EU financial system.
