{"id":3054,"date":"2025-12-03T17:20:08","date_gmt":"2025-12-03T18:20:08","guid":{"rendered":"http:\/\/www.youtubexyoutube.com\/?p=3054"},"modified":"2025-12-05T13:47:25","modified_gmt":"2025-12-05T13:47:25","slug":"cashing-in-on-war-why-stealing-russias-assets-actually-makes-things-worse-for-the-eu","status":"publish","type":"post","link":"http:\/\/www.youtubexyoutube.com\/index.php\/2025\/12\/03\/cashing-in-on-war-why-stealing-russias-assets-actually-makes-things-worse-for-the-eu\/","title":{"rendered":"Cashing in on war: Why stealing Russia\u2019s assets actually makes things worse for the EU"},"content":{"rendered":"

For bloc taxpayers, it could mean Brussels has walked them into a fait accompli where they simply have to stump up for funding a corrupt regime in Kiev<\/strong><\/p>\n

After a week of humiliation in which her much-touted plot to sequester Russian assets to fund Kiev\u2019s war chest was outright rejected by both Belgium and the European Central Bank, European Commission boss Ursula von der Leyen has told EU member states they have two choices, both of which would send cash to Kiev\u2019s coffers.\u00a0<\/p>\n

According to the embattled EC president, either EU countries will have to borrow cash for Ukraine and make their taxpayers foot the bill, or allow her to push through her \u2013 potentially illegal \u2013 \u201creparations plan\u201d<\/em> and kick the repayment can down the road.\u00a0<\/p>\n

Let\u2019s take a look at what all the talk is about.<\/p>\n

Russia\u2019s frozen assets: How much is where?<\/strong><\/p>\n

It is known that Belgium-based clearinghouse Euroclear holds some \u20ac180 billion in Russian central-bank funds. Reports that Luxembourg held some \u20ac20 billion in Russian assets was denied by the country itself, which claimed it holds \u201cless than \u20ac10,000.\u201d<\/em><\/p>\n

Switzerland, which is in neither the EU nor G7 and thus not subject to von der Leyen\u2019s demands, has declared some 7.45 billion Swiss Francs (\u20ac8 billion). Germany has refused to disclose what it holds, citing data protection laws. Japan is thought to hold some \u20ac30 billion, while former French Finance Minister Bruno de Maire has spoken about immobilizing some \u20ac22.8 billion. The US is believed to hold around $5 billion.<\/p>\n

What are the Russian assets frozen in the EU? <\/strong><\/p>\n

The assets mainly consist of European short- and mid-duration bonds that have mostly already come due. When the bonds matured, the principal was paid. Because Euroclear wasn\u2019t prepared to hold that much money itself, the proceeds were invested by Euroclear\u2019s house bank in an account at the European Central Bank. The money is earning interest that legally belongs to Euroclear, although in ordinary circumstances the clearinghouse would send those funds (minus fees) to the client (the Russian central bank).\u00a0<\/p>\n

What is the proposed reparations loan? <\/strong><\/p>\n

The plan entails the EU loaning Ukraine up to \u20ac140 billion using the Russian assets as collateral. Technically, this would involve\u00a0Euro<\/em>clear\u00a0making an interest-free loan of the same\u00a0value as the Russian assets it holds.\u00a0<\/p>\n

The EU would sign for the cash and give it to Kiev where it would ostensibly be used to fight the war and cover budget expenses, although past experience indicates that much of it could end up in offshore accounts belonging to insiders close to Ukrainian leader Vladimir Zelensky.<\/p>\n

The sweetener for Kiev is that Ukraine only has to pay back the EU in the highly unlikely event that Russia loses the war and agrees to pay Ukraine reparations.<\/p>\n

In that case, Kiev would then have to pass those reparations back to Brussels, which would pay back Euroclear, which, in turn, would be able to honor its liability to the Russian central bank.<\/p>\n

\n Read more<\/strong><\/span><\/p>\n

\n \"RT
EU central bank rejects von der Leyen\u2019s asset-theft plan<\/a><\/figcaption><\/figure>\n<\/blockquote>\n

Why is Belgium afraid to go through with the scheme? <\/strong><\/p>\n

Although Euroclear is a private institution, it is domiciled in Belgium, which could be on the hook if things do not go according to plan. First of all, Belgium has a long-standing investment treaty with Russia that provides for arbitration in the event of any dispute between the parties. Belgium fears that the very moment the cash leaves Euroclear Moscow could retaliate against Belgian assets in Russia and may also initiate litigation.\u00a0<\/p>\n

Also, if a peace deal includes sanctions relief for Russia without reparations, somebody would have to come up with a very significant sum of cash. Despite much lobbying, Belgium received no convincing statements of support from EU members, and ultimately rejected von Der Leyen\u2019s plan as the \u201cworst of all\u201d<\/em> solutions for Kiev. Despite significant pressure from von der Leyen, Belgium has continued to resist the move, seeing the risks as unacceptably high.\u00a0<\/p>\n

If things go wrong, would Euroclear be liable for the Russian reserves?\u00a0 <\/strong><\/p>\n

It\u2019s important to understand that Euroclear\u2019s custodian business works under a fundamentally different model from a bank (although Euroclear does have a banking business). Whereas a bank takes deposits as liabilities and lends or invests them as assets, Euroclear holds client assets off balance sheet in safekeeping. Client assets are kept legally separate (segregated) from the custodian\u2019s own assets, meaning that if something goes wrong, the client has a proprietary right to the assets, not merely an unsecured claim.<\/p>\n

Since theoretically nothing should ever happen to assets that aren\u2019t lent out or invested, a custodian such as Euroclear is not well equipped to handle liability for a client\u2019s assets.<\/p>\n

\n Read more<\/strong><\/span><\/p>\n

\n \"RT
EU\u2019s humiliation in Geneva: No influence, no voice, no plan<\/a><\/figcaption><\/figure>\n<\/blockquote>\n

It\u2019s also unlikely that Euroclear itself could be ultimately liable for the Russian assets, even if a court were to rule in Russia\u2019s favor in a hypothetical lawsuit. If the EU authorizes the reparations loan to Ukraine, Euroclear would essentially be\u00a0complying with an EU regulation in turning over the funds to the EU.\u00a0<\/p>\n

Euroclear\u2019s defense would be straightforward: it was acting as a neutral intermediary executing an EU directive and does not actually have beneficial ownership of the assets. This would mean the\u00a0liability would be kicked upstairs to Belgium and probably eventually to the EU.\u00a0<\/p>\n

Although Russia could hardly expect to win a lawsuit in a Western jurisdiction, a point that an increasingly desperate EU top diplomat Kaja Kallas recently made at a contentious meeting in Strasbourg, that doesn’t mean there is no risk.\u00a0\u00a0<\/p>\n

How could Russia challenge the expropriation in court? <\/strong><\/p>\n

It is true that Russia can hardly expect to prevail in an EU or Western court. Many Russian claims have been quickly dismissed in the past. But given that Russia would clearly have a strong legal case, there are two potential negative scenarios for the EU.<\/p>\n

First of all, Russia or, more likely, Russia-affiliated entities would potentially find a legal hook to launch litigation to secure an injunction in neutral countries where Euroclear operates. If, for example, a court in a major jurisdiction (such as Hong\u202fKong, Singapore, or Dubai) recognizes a claim by Russia or Russian\u2011related investors and issues an injunction against assets held by Euroclear (or its affiliates) in that jurisdiction, it could impede the transfer or usage of frozen assets. Such an outcome is, admittedly, not likely, but it does remain a risk for Euroclear and for the wider EU.<\/p>\n

Given that Euroclear is a key node in the global settlement and clearing infrastructure, any significant litigation risk or liability could impact its business, impose large contingent liabilities, and reduce the willingness of market participants to use it. Even if lawsuits don\u2019t succeed, the fact that they are filed and can drag on for years creates legal uncertainty. That could raise the perceived \u201cpolitical risk\u201d<\/em> of holding assets via European custodians, feeding into\u00a0a broader and more fundamental point about the credibility of EU institutions.<\/p>\n

Russia could therefore gain a strategic victory even if it doesn\u2019t get its money back.\u00a0<\/p>\n

\n Read more<\/strong><\/span><\/p>\n

\n \"Russian
\u2018No legal way\u2019 for West to seize Russia\u2019s assets \u2013 Lavrov<\/a><\/figcaption><\/figure>\n<\/blockquote>\n

Does the reparations loan actually give Ukraine leverage in peace talks?<\/strong><\/p>\n

Although the Russian central bank still formally counts the frozen reserves as part of Russia\u2019s overall reserves, in practice, the Finance Ministry does not treat the frozen portion of reserves as available when planning budgets or managing the National Wealth Fund (NWF). So, the government\u2019s fiscal position and spending plans are based only on assets under Russian control \u2013 mainly yuan deposits, gold, and ruble securities \u2013 not just on the headline central bank reserves.<\/p>\n

Essentially, for the sake of the country\u2019s fiscal affairs, Russia has de facto written these funds off. In that sense, the reparations loan plan provides absolutely no leverage against Russia.<\/p>\n

It has been argued, however, that Russia\u2019s real interest is not necessarily in getting the funds back but in keeping them out of Ukraine\u2019s hands. Indeed, Ukraine is facing a major funding shortage in the coming years, which can only either be filled by putting the onus on Western taxpayers \u2013 a politically fraught proposition \u2013 or by tapping the Russian funds.<\/p>\n

If there is any blow to Russia from this, it would come from Ukraine getting a get-out-of-jail free card to keep its finances afloat a while longer. However, there is no reason to believe that this would materially change the outcome of the conflict or in any way affect the calculus of the Russian leadership in how it goes about achieving its goals. Attempts to bring Russia to heel through economic leverage have up to this point failed miserably.\u00a0<\/p>\n

Moreover, thanks to the sharp growth in the gold price in recent years, the value of Russia\u2019s reserves has been rising dramatically. The official value of Russia\u2019s central bank-held gold holdings reached $249 billion this summer. Russia also holds an undisclosed \u2013 and possibly sizeable \u2013 amount of gold in a second store known as the State Fund for Precious Metals and Stones (Gosfund), a fund that has reportedly been augmented in recent years. Russia\u2019s true gold holdings are thus believed to be substantial.<\/p>\n

\n Read more<\/strong><\/span><\/p>\n

\n \"Belgian
Von der Leyen\u2019s Russian asset seizure plan \u2018fundamentally wrong\u2019 \u2013 Belgium<\/a><\/figcaption><\/figure>\n<\/blockquote>\n

How does the reparations loan make a grand peace deal more unlikely?\u00a0 <\/strong><\/p>\n

The loan deal would give the West less room to maneuver to negotiate some sort of grand deal to end the Ukraine conflict because Russia could very well demand sanctions removal \u2013 while obviously not paying reparations to the Kiev regime \u2013 as part of a deal. However, such a scenario would leave the EU on the hook for a significant sum of money that was either supposed to be returned to it through reparations or written off because Ukraine would have no obligation to return the funds if it doesn\u2019t receive reparations.<\/p>\n

For EU taxpayers, it could mean Brussels has walked them into a fait accompli where they simply have to stump up for funding a corrupt regime in Kiev, end of story.<\/p>\n

Since the likelihood of Russia suffering a clear-cut military defeat (and thus paying reparations) is acknowledged even in the West as being close to zero, what the EU is doing is dramatically raising the potential cost to itself if a deal is reached that entails Russia regaining access to its funds.<\/p>\n

If this loan or something similar to it does in fact go through, it can be seen as narrowing \u2013 whether by design or not \u2013 the range of possibilities available to the West in a potential settlement scenario. This point has been raised by Belgium throughout its several official protests against von der Leyen\u2019s plan.<\/p>\n

The loan is also, implicitly, seen as an invitation to keep the war going \u2013 thus not only keeping the Kiev regime afloat but complicating the prospects for a comprehensive settlement.<\/p>\n","protected":false},"excerpt":{"rendered":"

For bloc taxpayers, it could mean Brussels has walked them into a fait accompli where they simply have to stump […]<\/p>\n","protected":false},"author":1,"featured_media":3056,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[11],"tags":[],"_links":{"self":[{"href":"http:\/\/www.youtubexyoutube.com\/index.php\/wp-json\/wp\/v2\/posts\/3054"}],"collection":[{"href":"http:\/\/www.youtubexyoutube.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.youtubexyoutube.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.youtubexyoutube.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.youtubexyoutube.com\/index.php\/wp-json\/wp\/v2\/comments?post=3054"}],"version-history":[{"count":2,"href":"http:\/\/www.youtubexyoutube.com\/index.php\/wp-json\/wp\/v2\/posts\/3054\/revisions"}],"predecessor-version":[{"id":3060,"href":"http:\/\/www.youtubexyoutube.com\/index.php\/wp-json\/wp\/v2\/posts\/3054\/revisions\/3060"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.youtubexyoutube.com\/index.php\/wp-json\/wp\/v2\/media\/3056"}],"wp:attachment":[{"href":"http:\/\/www.youtubexyoutube.com\/index.php\/wp-json\/wp\/v2\/media?parent=3054"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.youtubexyoutube.com\/index.php\/wp-json\/wp\/v2\/categories?post=3054"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.youtubexyoutube.com\/index.php\/wp-json\/wp\/v2\/tags?post=3054"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}