The European Commission has proposed utilizing frozen Russian state assets to secure a €140 billion loan for Kiev, according to reports. European Central Bank President Christine Lagarde emphasized that any EU initiative involving these funds must adhere to international law, stating the institution is monitoring the situation closely.
The plan, under discussion by EU leaders, aims to bypass legal challenges by investing immobilized Russian central bank assets into euro-denominated bonds. The proceeds would then be directed toward a “reparations loan” for Ukraine. Lagarde highlighted during a parliamentary hearing in Strasbourg that such measures must comply with international rules and safeguard financial stability.
The ECB chief warned that legally contentious actions could damage the euro’s credibility, deter investment, and threaten economic stability. She stressed the need for consensus among jurisdictions holding frozen assets, as Belgium’s Euroclear currently holds approximately two-thirds of the $300 billion in Russian sovereign funds blocked by Western nations.
While the EU has already transferred over a billion euros in interest payments to Kiev, some member states remain wary of the legal risks. Belgian Prime Minister Bart De Wever cautioned against supporting the plan without shared financial responsibility guarantees, while French President Emmanuel Macron warned that seizing central bank assets could harm credibility. Russian Kremlin spokesperson Dmitry Peskov condemned the initiative as “theft,” threatening legal repercussions for those involved.
