EU agrees to indefinitely freeze €210 bn Russian assets as Moscow threatens to retaliate

The European Union agreed on Friday to indefinitely freeze Russia's sovereign assets spread across the bloc, as Moscow threatens to retaliate against Euroclear. The decision of the EU to use emergency powers to immobilise €210 bn of Russia’s central bank’s assets marks a significant step towards using the cash to aid Ukraine’s defence.

European Council president António Costa and other EU leaders delivered the commitment on Friday. It was in October when they agreed to “keep Russian assets immobilised until Russia ends its war of aggression against Ukraine and compensates for the damage caused”.

Before this move, the EU was obligated to renew the frozen assets every six months, creating potential for a Kremlin-friendly government, such as Hungary, to veto the move. Interestingly, the move came hours after Russia’s central bank said it was filing a lawsuit against Euroclear, the Brussels central securities depository that holds these assets.

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The lawsuit that is being filed in Moscow court alleges that Euroclear’s “illegal actions” had caused “damage” to the central bank’s ability to manage funds and securities. Meanwhile, the European financial institution has declined to comment on the matter. However, a spokesperson said it was “currently fighting more than 100 legal claims in Russia”.

Why it matters

Last week, the European Commission proposed a €90bn (£79bn) loan for Ukraine, secured against Russian assets immobilised in the EU since its full-scale invasion. However, the plan was blocked by Belgium, which fears a cascade of lawsuits from Moscow and the seizure of Belgian assets in the country.

On Friday, the Prime Minister of Belgium, Bart De Wever, met his British counterpart Keir Starmer in Downing Street for long-planned talks on the EU-UK reset, migration and the Russian assets. After the meeting, De Wever’s spokesperson said they had discussed “the possible use of the value of immobilised Russian sovereign assets” and “agreed to continue to work closely to make progress on this complex issue”.

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Meanwhile, a Downing Street spokesperson also shared an identical statement. “It was clear, they agreed, that keeping up the economic pressure on Russia and putting Ukraine in the strongest possible position would remain the only way to achieve a just and lasting peace," it said.

It is pertinent to note that the meeting between the two leaders is coming ahead of an EU summit next week, when leaders have promised decisions on funding Ukraine in 2026-27, amid warnings that Kyiv will run out of money next spring to fund its defence and pay doctors and teachers.

EU officials believe that the proposed €90bn loan will meet two-thirds of Ukraine’s financial needs for the next two years, and expect Kyiv’s other “international partners” to provide the rest. The Belgian government has said that it must have guarantees from EU partners that it will not be on the hook for a multibillion-euro bill if it is sued by Russia.