EU to freeze €210bn in Russian assets indefinitely

 

EU to freeze €210bn in Russian assets indefinitely

 

The decision is a significant step towards using the cash to aid Ukraine’s defence – but Moscow is threatening to retaliate

 

Jennifer Rankin in Brussels

Fri 12 Dec 2025 21.18 CET

https://www.theguardian.com/world/2025/dec/12/eu-to-freeze-210bn-in-russian-assets-indefinitely

 

The EU has agreed to indefinitely freeze Russia’s sovereign assets in the bloc, as Moscow stepped up its threats to retaliate against Euroclear, the keeper of most of the Kremlin’s immobilised money.

 

The decision by the EU to use emergency powers to immobilise €210bn (£185bn) of Russia’s central bank’s assets marks a significant step towards using the cash to aid Ukraine’s defence.

 

European Council president António Costa confirmed on Friday that EU leaders had delivered on a commitment, made in October, to “keep Russian assets immobilised until Russia ends its war of aggression against Ukraine and compensates for the damage caused”.

 

Before this step, EU sanctions underpinning the frozen assets needed to be renewed every six months – creating potential for a Kremlin-friendly government, such as Hungary, to veto the move.

 

The decision came hours after Russia’s central bank said it was filing a lawsuit against Euroclear, the Brussels central securities depository that holds these assets. The organisation, once a little-known part of international financial plumbing that is now in the spotlight, has no say on how the frozen funds are used.

 

The lawsuit, being filed in a Moscow court, claims Euroclear’s “illegal actions” had caused “damage” to the central bank’s ability to manage funds and securities.

 

Euroclear declined to comment, but a spokesperson said it was “currently fighting more than 100 legal claims in Russia”.

 

Last week, the European Commission proposed a €90bn (£79bn) loan for Ukraine, secured against Russian assets immobilised in the EU since its full-scale invasion. But the plan has been blocked by Belgium, which fears a cascade of lawsuits from Moscow and the seizure of Belgian assets in the country.

 

Belgium’s prime minister Bart De Wever met Keir Starmer in Downing Street on Friday for long-planned talks on the EU-UK reset, migration and the Russian assets.

 

De Wever’s spokesperson said they had discussed “the possible use of the value of immobilised Russian sovereign assets” and “agreed to continue to work closely to make progress on this complex issue”.

 

A Downing Street spokesperson issued a near-identical statement, saying: “It was clear, they agreed, that keeping up the economic pressure on Russia and putting Ukraine in the strongest possible position would remain the only way to achieve a just and lasting peace.”

 

The meeting comes ahead of an EU summit next week, when leaders have promised decisions on funding Ukraine in 2026-27, amid warnings that Kyiv will run out of money next spring to fund its defence and pay doctors and teachers.

 

EU officials believe the proposed €90bn loan will meet two-thirds of Ukraine’s financial needs for the next two years, and expect Kyiv’s other “international partners” to provide the rest.

 

The Belgian government says it must have guarantees from EU partners that it will not be on the hook for a multibillion-euro bill if it is sued by Russia.

 

De Wever has previously described the proposal as “fundamentally wrong” and argued it would violate international law and endanger the stability of the euro currency.

 

In a sign of tensions around the plan, Belgium, Bulgaria, Malta and Italy said only EU leaders should decide on use of the immobilised assets. In a statement announcing support for the emergency powers clause to freeze the funds indefinitely on Friday, they urged EU countries “to continue exploring and discussing alternative options in line with EU and international law”.

 

Belgium argues the EU should borrow money on capital markets to fund Ukraine, secured against unallocated funds (headroom) in the EU budget. But many member states are loath to take out more common debt.

 

Germany, usually a champion of economic orthodoxy, sees the frozen assets plan as the best option and has pledged to provide one-quarter (€50bn) of needed guarantees for Belgium.

 

EU officials argue that the legal risk to Euroclear, and therefore Belgium, would be limited.

 

Under the complex scheme, the EU would borrow cash from Euroclear, then loan the funds to Ukraine, while Russia remains the legal owner of the assets. Ukraine would only repay the money if and when it received reparations from Moscow for colossal damage inflicted during the war.

 

The UK, which hosts €27bn (£23bn) of frozen Russian assets, supports the idea and expects some, but not all, G7 countries to move forward with a similar plan, following a decision on the Euroclear-held assets. US participation in the scheme is less certain, although it holds only a modest €4bn (£3.5bn) in immobilised assets.