Seizing Russian assets could be a double-edged sword for the EU

Song Minh |

The unintended consequences of the EU seizing Russian assets have been warned by Euroclear, Europe's largest clearing house.

In an interview with Bloomberg on the sidelines of the World Economic Forum in Davos, Switzerland, Euroclear CEO Valerie Urbain stressed that if the EU seizes frozen Russian assets, it could lead to retaliatory measures from Moscow, further destabilizing EU financial markets.

“Russia could take retaliatory measures, which would further destabilize the financial situation,” Ms. Urbain said.

Euroclear holds about $213 billion (197 billion euros) of the nearly $300 billion in assets of the Russian Central Bank frozen by the US and EU after the Ukraine conflict escalated in February 2022.

Ms. Urbain said that these frozen assets could be used as leverage in Russia-Ukraine peace talks. However, she noted that some EU officials are pushing for their seizure to finance Ukraine’s military and reconstruction efforts.

Euroclear's CEO stressed that if confiscation occurs, EU countries need to transfer not only the assets but also the accompanying liabilities, in order to protect this international financial institution specializing in providing payment, custody and clearing services for securities transactions from potential claims from Russia.

Ms Urbain also warned in December that using Russian assets or profits from them to finance Ukraine could threaten the role of the euro as a global reserve currency and negatively affect the EU's financial stability.

Tru so Euroclear o Brussels, Bi. Anh: Wiki
Euroclear headquarters in Brussels, Belgium. Photo: Wiki

Several EU and G7 countries have been debating the issue for the past three years, but many fear that the move to seize Russian assets could erode confidence in the European financial system and set a dangerous precedent.

The Ukrainian government has repeatedly called on its Western allies to seize Russian assets to finance its military and reconstruction operations. Meanwhile, in July, the European Commission announced that it was ready to transfer the first tranche of €1.55 billion in interest from frozen Russian Central Bank assets to Ukraine.

However, Moscow has strongly opposed the freezing and confiscation of assets, calling it “theft.” Kremlin spokesman Dmitry Peskov warned that Russia would take legal action against anyone involved in the seizure.

With Euroclear’s warning, EU leaders face a fraught decision: take aggressive action against Russian assets to support Ukraine, or maintain the stability and credibility of the European financial system. Whether this will be a strategic move or a “double-edged sword” remains to be seen.

Song Minh
TIN LIÊN QUAN

Deadline for Russia sanctions to be lifted is approaching

|

Hungary warns EU that sanctions against Russia can only be extended if Ukraine restores gas transit.

EU admits it paid a heavy price for abandoning Russian gas

|

The EU admits that losing cheap Russian gas supplies will cost the continent dearly as costs skyrocket.

Russia's new move to seize Western assets

|

Russia is drafting new legislation to confiscate assets from Western countries that have frozen Russian assets.

Many children going out for Tet received lucky money from the Secretary of Binh Duong province

|

In Thu Dau Mot city, Binh Duong, many children who went out to celebrate Tet received lucky money from the Secretary of Binh Duong Provincial Party Committee.

Peach and kumquat prices reduced by more than 50% but still no customers

|

Although peach and kumquat prices at major flower markets have dropped sharply, the number of buyers is still sparse, causing many traders to worry because there is still a lot of inventory.

Landlord gives banh chung to workers celebrating Tet away from home

|

Many landlords give banh chung and candies to workers who cannot return home for Tet - a small act but helps them ease their homesickness for Tet.

Russia captures Ukraine's last bastion in Donbass

|

The Russian Defense Ministry confirmed control of the strategic town of Velikaya Novoselka in Donetsk, in the Donbass region, eastern Ukraine.

Businesses delay and owe wages to workers

|

Twice, the Inspector of the Department of Labor, Invalids and Social Affairs of Ho Chi Minh City sent a document requesting the enterprise to pay wages to its employees, but the enterprise has not yet done so.

Deadline for Russia sanctions to be lifted is approaching

Song Minh |

Hungary warns EU that sanctions against Russia can only be extended if Ukraine restores gas transit.

EU admits it paid a heavy price for abandoning Russian gas

Khánh Minh |

The EU admits that losing cheap Russian gas supplies will cost the continent dearly as costs skyrocket.

Russia's new move to seize Western assets

Ngọc Vân |

Russia is drafting new legislation to confiscate assets from Western countries that have frozen Russian assets.