Von der Leyen facing new pushback over ‘crazy’ Russian asset plan – FT

The EC president’s initiative to use the frozen funds to back a loan for Kiev has raised legal concerns

European Commission President Ursula von der Leyen’s scheme to use frozen Russian assets to back a loan for Ukraine is “crazy” due to the inevitable financial and legal risks, unnamed senior EU officials told the Financial Times.

After the escalation of the Ukraine conflict in 2022, EU countries froze around €210 billion ($245 billion) in Russian central bank assets, including €185 billion at Belgian-based Euroclear.

On Wednesday, von der Leyen submitted two proposals to finance Ukraine: EU-level borrowing, which is likely to be blocked because it requires unanimous support; or a ‘reparations loan’, which is more viable as it only needs a qualified majority to pass.

According to one official cited by the newspaper, EU lawyers consider “the option of the reparations loan the worst of all” due to inevitable risks from a legal and financial perspective.

”It’s crazy and I don’t understand how they think they will get away with this,” a senior member state official said, adding that “the precedent that you set with this could have wide-ranging ramifications.”

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“If you ask me if we’re driving straight into a wall, then the answer is yes,” another senior EU official told the outlet.

Belgium has mounted the strongest resistance to von der Leyen’s plan, warning that the scheme involves serious financial and legal risks and has demanded that its EU partners share the responsibility for the fallout. The other major holders of Russian assets within the bloc, including France, Luxembourg, and Germany, reportedly continue to oppose an outright seizure, as do other states such as Italy, Hungary, and Slovakia.

Russia has denounced the use of its sovereign assets as theft and warned that any seizure would trigger far-reaching legal and retaliatory consequences. Earlier this week, Kremlin spokesman Dmitry Peskov said the freeze itself is illegal, adding that Moscow would take any expropriation to an international court.