Russia Sues Euroclear Over EU Plan to Loan Frozen Assets to Ukraine

BRUSSELS — The battle over Russia’s €210 billion in frozen sovereign assets escalated dramatically today, with the Russian Central Bank (RCB) suing Belgian bank Euroclear in a Moscow court, branding the EU’s plan to fund Ukraine an “act of theft.”

The legal action was expected in Brussels but highlights the risks faced by Belgium, which holds the vast majority of the assets (€185bn) at the Brussels-based clearing house, Euroclear.

The urgency stems from Ukraine’s looming cash shortage, which EU leaders hope to address at a summit next week by finalizing a plan to secure a €90 billion “reparations loan” backed by the principal of the Russian assets.

Belgian Prime Minister Bart de Wever discussed Europe’s frozen assets plan with UK Prime Minister Sir Keir Starmer on Friday

However, the CEO of Euroclear, Valérie Urbain, has warned that directly using the assets could “destabilise the international financial system.” Furthermore, Belgium’s Prime Minister, Bart de Wever, is under pressure to protect his small economy (GDP of €565bn) from a catastrophic financial blow.

“Belgium is a small economy. Belgian GDP is about €565bn – imagine if it would need to shoulder a €185bn bill,” notes Professor of Financial Law Veerle Colaert. She also suggests the plan to require Euroclear to grant a massive loan to the EU may violate EU banking regulations, leaving Belgium exposed to a bailout if things fail.

To secure Belgian cooperation ahead of the summit, the EU is scrambling to come up with water-tight guarantees. The European Commission plans to offer Belgium protection with a guarantee covering the full €210bn of Russian assets in the EU. They argue any Russian court ruling against Belgium would be irrelevant as it would not be recognized in the EU.

In a key development aimed at easing Belgian fears of repeated legal challenges, EU ambassadors are expected to agree to immobilize Russia’s Central Bank assets held in Europe indefinitely, using an emergency clause (Article 122 of the EU Treaties). Until now, the freeze required a difficult unanimous vote every six months.

The plan is deemed “the most financially feasible and politically realistic solution” by seven EU member states, including the Baltics, Finland, and Poland, who warn there is “no time to lose.”