Russia Warns EU Plan to Use Frozen Funds Undermines Global Finance

By Staff, Agencies

European efforts to finance Ukraine using frozen Russian assets are eroding the foundations of the international financial system, a senior aide to Russian President Vladimir Putin has warned.

Kirill Dmitriev, Putin’s advisor on international investment, criticized EU plans to issue a so-called “reparation loan” to Kiev backed by immobilized Russian sovereign funds.

He argued that such a move would amount to an unprecedented seizure of national assets and carry serious legal and financial consequences.

Writing on X on Monday, Dmitriev said “panicked” EU officials supporting Ukraine are making a grave miscalculation.

By asserting claims over sovereign reserves, he said, Europe would undermine the global system of national reserves and increase costs and risks for all participants in international finance.

“Russia will win in court and get them [sovereign funds] back. EU guarantors will pay Ukraine’s bill. EU/€/Euroclear will suffer,” Dmitriev wrote.

Euroclear, the Belgium-based clearing house where most frozen Russian assets are held, has emerged as a key opponent of the proposal, alongside the Belgian government.

Both have warned the plan could expose Euroclear to massive legal liabilities, potentially threatening its financial stability.

As of December 2024, Euroclear held more than €40 trillion in assets for clients worldwide, including equities and bonds, and safeguards reserves for 103 central banks.

Senior figures, including European Central Bank President Christine Lagarde, have previously cautioned that using frozen Russian assets could cause lasting damage to the credibility of the EU’s financial system.

Last week, the Bank of Russia filed a lawsuit against Euroclear in Moscow seeking damages over the immobilization of its funds.