Russia’s central bank has sharply condemned European Union proposals to use its frozen assets, calling the idea a direct violation of international law and the principle of sovereign immunity. The dispute centres on billions of euros held largely by the Brussels-based clearing house Euroclear, which Russia says it can no longer access because of EU sanctions. The bank also announced that it has filed a lawsuit in a Moscow court against Euroclear, accusing the institution of obstructing its ability to manage funds and securities.
What the EU Is Planning
The escalation follows a European Commission press release on December 3 outlining new methods to support Ukraine’s financing needs in 2026 and 2027. One of the options would allow the Commission to borrow cash balances generated by Russia’s immobilised central bank assets from EU financial institutions. Those funds would then be channelled into a reparations-linked loan for Ukraine. In parallel, EU member states are considering an important procedural shift: making the freeze on Russian assets open-ended rather than renewing it every six months. This would lock in the status of the assets for as long as necessary and signal the EU’s long-term commitment to backing Ukraine.
Moscow’s Pushback
Russian officials argue that these steps amount to an unprecedented seizure of sovereign property, and they have repeatedly warned that any such move will be met with what they call the “harshest reaction.” Russia insists it is prepared to challenge the EU not just in national courts but also in international organisations, foreign judicial systems and arbitral tribunals. The central bank emphasises that it will seek to enforce favourable rulings across UN member states, positioning the dispute as a global legal battle rather than a bilateral clash.
Why It Matters
The fight goes far beyond Russia and the European Union. If the EU moves ahead, it could redefine how sovereign assets are handled during conflicts and set a powerful precedent for holding aggressor states financially accountable. For Russia, the stakes are as much political as economic, since losing access to these reserves weakens its financial cushion and challenges its status under international norms. For Ukraine, the initiative represents a potentially critical source of long-term funding at a time when Western political support is becoming more uncertain.
What’s Next
The EU is expected to push ahead with its plan to formalise the freeze and debate the legal mechanisms for borrowing against Russia’s assets. Moscow will continue its legal offensive and attempt to block the EU’s actions through every available forum. The coming months will likely determine whether the EU can legally operationalise the proposal, and whether Russia’s counter-strategy can meaningfully slow or complicate the process. The outcome will shape not only the trajectory of EU–Russia relations but also how future conflicts involving frozen state assets are handled worldwide.
With information from Reuters.