What's happened
The EU is considering a proposal to redirect approximately €180 billion in Russian assets held at Euroclear to fund loans for Ukraine. This move aims to leverage frozen Russian assets to support Kyiv's war effort, amid ongoing debates over legality and political implications. The plan is still under discussion as of late September 2025.
What's behind the headline?
The EU's proposal to redirect Russian assets reflects a strategic shift in how frozen assets are utilized in conflict resolution. By considering swaps with eurobonds, the EU aims to avoid legal complications associated with outright asset seizure, which could trigger international lawsuits and set a dangerous precedent. This approach underscores the tension between legal constraints and political objectives. The opposition from Russia, particularly Dmitry Medvedev's vow to sue, highlights the high-stakes nature of this move. If successful, the plan could provide Ukraine with much-needed financial support, but it risks escalating tensions with Russia and complicating international law. The European Central Bank's concerns about the legality and precedent of seizing assets suggest that this will remain a contentious issue, with the potential for significant geopolitical fallout.
What the papers say
Bloomberg reports that the EU is exploring redirecting €180 billion in Russian assets held at Euroclear to fund loans for Ukraine, with a proposal to swap the assets for eurobonds to avoid legal issues. Meanwhile, Bloomberg also notes that a separate plan involves using the assets to issue a reparations loan, contingent on Russia paying reparations, which Moscow dismisses as unlikely. Politico highlights the internal debates within the EU, including opposition from the European Central Bank, which remains cautious about seizing assets outright. The ECB's Christine Lagarde has called for written assurances, emphasizing the legal sensitivities involved. Russia's Dmitry Medvedev has publicly vowed to sue any moves to seize or swap the assets, indicating strong resistance from Moscow. The divergence in perspectives underscores the complexity of leveraging frozen assets in conflict resolution.
How we got here
The EU has accumulated around €200 billion in Russian assets frozen at Euroclear due to sanctions related to Russia's invasion of Ukraine. Previously, interest from these assets was used to fund EU loans, but leaders now debate whether to seize the assets directly. The European Commission has proposed a legal strategy to swap the assets for short-term bonds, avoiding outright seizure and potential lawsuits. Russia's officials, including Dmitry Medvedev, have vowed to sue any such moves, complicating the process. The plan aligns with broader efforts to finance Ukraine's defense and recovery, contingent on Russia paying reparations, which remains unlikely.
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Ukraine is a country in Eastern Europe. It is the second-largest European country after Russia, which borders it to the east and northeast.
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The European Union is a political and economic union of 27 member states that are located primarily in Europe. Its members have a combined area of 4,233,255.3 km² and an estimated total population of about 447 million.