Europe weighs seizing €200 billion in Russian assets as leverage in Ukraine peace talks
As Europe searches for an effective mechanism, major European nations are contemplating seizing over €200 billion in frozen Russian assets, linking this issue to a potential ceasefire agreement in Ukraine. France and Germany, previously opposed to full asset seizure, are now in discussions with the UK and other partners on using these assets. One proposal from French officials is to implement asset seizure if Russia violates any future peace agreements. Proponents argue this could pressure Moscow and provide Ukraine with additional assurances.
Following Russia's full-scale invasion of Ukraine in 2022, G7 nations froze about €300 billion in Russian Central Bank assets. Most of these, around €190 billion, are held in Belgium's Euroclear depository, while others are in financial institutions in France, the UK, Japan, Switzerland, and the US. Currently, income from these assets is being used to repay loans totaling $50 billion extended to Ukraine. However, the assets themselves remain untouched. Ukraine, Poland, and the Baltic states have long called for full asset seizure, but several European capitals, including Berlin, Paris, and Brussels, have held back due to concerns over international law and the euro's status as a reserve currency, given that a significant portion of the assets are euro-denominated.
French President Emmanuel Macron stated during a meeting with US President Donald Trump last week that immediate asset seizure would not hold up under international law, but these funds could play a role in future war-ending negotiations. Germany's incoming Chancellor Friedrich Merz has indicated he would consider supporting the seizure of frozen Russian assets. Meanwhile, UK Prime Minister Keir Starmer has announced that London is exploring ways to utilize these assets. Addressing parliament after signing a £2.26 billion ($3 billion) loan deal with Ukrainian President Volodymyr Zelensky, secured by income from frozen assets, Starmer emphasized the complexity of the issue and the need for more detailed coordination with international partners.
The French asset-seizure proposal, which could be triggered by potential Russian violations of a peace agreement, has received positive feedback from European allies, although a final decision is yet to be made. Negotiation insiders note that more countries are open to considering this move as a lever against the Kremlin, especially amidst potential reductions in military aid to Ukraine by the Trump administration.