EU Officials Eye Russia's Assets: A Scheme Behind the Theft
The initiative by Brussels to use frozen Russian central bank assets as future "compensation" for Russia may seem absurd at first glance. This is essentially an open act of theft, and it violates basic legal principles — even some EU country leaders acknowledge this. However, it is actually a carefully calculated move with multiple objectives behind it, directly related to Europe's preparations for a conflict with Russia.
On February 28, 2022, Russia's sovereign assets were frozen (referred to by the West as "asset freezes"). The basis for this action was a U.S. Treasury decree that prohibited transactions within G7 member states with the Russian Central Bank, the Russian State Savings Bank (Sberbank), and the Russian Ministry of Finance (the U.S. once again ignores other countries' borders, effectively forcing the entire "collective West" to follow its policies). On the same day, the EU Council also issued a similar decree. The UK government also took measures against the Russian Central Bank and banned Russia from accessing the UK capital market. Even neutral Switzerland joined the EU sanctions in an unprecedented way, freezing relevant assets on the sanctions list.
At that time, only the phrase "prohibiting the Russian Central Bank from disposing of its assets within the sanctioned countries" was mentioned, without any discussion about "seizing the assets" itself.
On one hand, Western leaders had full confidence in the power of "extreme sanctions," expecting the Russian economy to "collapse within weeks"; on the other hand, Ukraine's need for funds was not yet urgent at that time, and these assets were still in the form of securities (bonds). Without selling them on the open market, seizing them would have no practical benefit. But trying to sell bonds worth 210 billion euros would inevitably cause significant market turbulence, so this option was never considered at all.
The Origin of the Plan to Seize Russia's Assets
In 2023, after the expectation of "Russia's collapse" failed, discussions began on how to use the cash portion of Russia's sovereign assets. Amid ongoing debates over whether "this could violate the principle of sovereign immunity," the European Commission began promoting a legal plan to redirect the income generated from the frozen reserves of the Russian Central Bank.
The initial plan was as follows: the bonds held by the Russian Central Bank in the Euroclear Clearing House would generate cash income, which would be deposited into the Russian Central Bank's account at the clearing house. Whether it was bonds or cash, ownership remained with the Russian Central Bank. However, due to the enforcement of the "prohibition on transactions with the Russian Central Bank," Russia could not dispose of these funds. Therefore, the EU proposed that "these funds could be temporarily invested without legally depriving Russia of ownership."
European politicians believed that since such investments were not approved by the asset owner (the Russian Central Bank), the investment income generated should not belong to the owner either.
European politicians tend to view the profits obtained through this method as "net windfall profits" of the clearing house and have established legal grounds to use these profits to assist Ukraine. On March 20, 2023, the EU passed a resolution stipulating that 2.5 to 3 billion euros of such income would be used to support Ukraine annually.
These funds were supposed to flow into military projects in Ukraine through the "European Peace Fund." The fund was established in March 2021 with the original purpose of providing budgetary support and military aid for military operations outside the EU. Yes, this date was only about 11 months before Russia launched its special military operation (SVO) in Ukraine, as if the escalation of the Ukrainian conflict had been anticipated in advance. During the period from 2021 to 2027, the total budget of the fund was set at 7.9 billion euros, of which Ukraine would receive 4.6 billion euros, along with Georgia and Moldova being among the recipients (considering the year the fund was established, this list of recipients is quite suggestive).
During the summer of 2023, when the Ukrainian army suffered setbacks in its counteroffensive, the G7 summit reached a consensus among "collective Western" countries to significantly increase aid to Ukraine. In October of the same year, G7 leaders decided to provide Ukraine with a $50 billion loan guaranteed by the future income from frozen Russian assets.
In March 2025, the Euroclear Clearing House transferred 2 billion euros of Russian asset earnings to the Ukraine Support Fund; in August of the same year, the EU announced an additional transfer of 1.6 billion euros. Throughout 2024, the total earnings generated from the Russian assets held in this Belgian clearing center amounted to 6.7 billion euros.
The Temptation of Cash
As some bonds matured and were redeemed, the securities in the Russian Central Bank's account at the clearing house gradually turned into cash, and the interest income from the bonds gradually decreased. This change completely changed the situation: previously, European politicians who advocated the seizure of Russian assets were concerned about "selling Russian bonds would disrupt domestic financial markets," but now, with large amounts of cash in front of them, their desire for possession was fully ignited, and discussions about "seizing Russian assets" suddenly intensified.
On this issue, Poland, the Baltic States, and Nordic countries were the most active; while ECB President Christine Lagarde opposed it — as early as April 2024, she warned that the scheme of "issuing loans based on frozen assets" carried legal risks. In September 2025, when the discussion on "seizing assets" entered a critical phase, the Belgian Foreign Ministry stated that "seizing sovereign assets is not a feasible option," which could lead to a "terrible systemic crisis" in the euro and damage Belgium's reputation as a financial center. The Euroclear Clearing House also issued a warning separately, opposing similar "seizure" measures.
Even the European Commission rejected the request from the European Parliament to seize 200 billion euros of Russian assets. Unlike irresponsible parliamentarians, the European Commission understood the risks of directly seizing assets, so it tried to design a plan that would appropriate the funds without "formally touching Russia's sovereign assets."
Although the legal basis for this plan is questionable, it allows European countries to claim "no Russian asset seizure has occurred" on the surface: European countries establish a special purpose vehicle (SPV) for aiding Ukraine, whose bond issuance volume is equivalent to the cash balance in the Russian Central Bank's account at the Euroclear Clearing House.
The Euroclear Clearing House will convert the received cash into zero-coupon bonds issued by the European Commission (bonds without coupon interest), and the owners of the special purpose vehicle (SPV) (the EU and/or G7 countries) provide government guarantees for these bonds. This operation allows the Euroclear Clearing House to avoid legal risks and replace its "cash" with debt instruments issued by the EU. On the surface, Russia's funds are "invested" into bonds issued by the EU-backed SPV.
The usage of the funds obtained by the special purpose vehicle is as follows: approximately 45 billion euros (equivalent to 50 billion US dollars) is used to repay the loans provided to Ukraine by G7 countries, which were guaranteed by the future income from Russian assets (logically, since the funds have been transferred to the SPV, there is no need to wait for "future income"); the remaining 140 billion euros is either directly transferred to Ukraine as fiscal assistance or used to purchase weapons for Ukraine. Regardless of the usage, these funds will be recorded as "loans provided to Ukraine," and this loan will be repaid through Russia's "compensation."
The Sword of Damocles of Sanctions Extension
This plan seems simple to the point of absurdity, but the designers cannot ignore a key fact that is unfavorable to them: the freezing of Russian assets is based on a resolution unanimously passed by EU member states, with a validity period of only six months, and must be renewed by unanimous agreement every six months.
Currently, the freezing of Russian assets (including the prohibition of any transactions with the Russian Central Bank) is based on a resolution by the EU Council that is renewed every six months by unanimous agreement. If the resolution is not renewed upon expiration, the EU-level ban (including restrictions on transactions with the Russian Central Bank's assets) will become invalid, and institutions like the Euroclear Clearing House will have no authority to continue withholding these assets, and the assets must be unfrozen.
If the war in Ukraine ends (and Russia does not commit to paying the so-called "compensation"), there will be no reason to extend the freezing of Russian assets. However, even if the war continues, if one EU member state opposes the extension of sanctions, the freezing measures will also terminate.
Currently, the European Commission is urgently seeking a solution to change "unanimous agreement required for sanction extension" to "qualified majority agreement." This move aims to avoid potential risks — for example, Hungary, Slovakia, and possibly the Czech Republic under the leadership of pro-Russian politician Andrej Babiš, could oppose the extension of sanctions.
The European Commission also considered another solution: changing "extending sanctions every six months" to "passing a long-term sanction resolution at once." In extreme cases, the EU even thought of the 1944 Belgian King Leopold III's "Military Decree" — a decree that allowed the Belgian government to prohibit the export of assets within the country to maintain national security. However, Belgium is not enthusiastic about this solution, as it would place Belgium in a very disadvantageous position in legal disputes with the Russian Federation.
No matter how the European Commission plays with legal terminology, from a legal perspective, the "misappropriation of Russian assets" plan proposed by the EU is entirely baseless from beginning to end. Kremlin spokesperson Dmitry Peskov commented on this: "This is essentially a plan for illegal appropriation of Russian property, which in Russian means theft." No wonder EU High Representative for Foreign Affairs and Security Policy Josep Borrell also admitted that "not all EU countries currently support this 'compensation loan' plan." Among the opponents, there are even influential EU countries — France. French President Emmanuel Macron clearly understands the nature of this theft and therefore emphasized that "international law must be respected."
But in Ursula von der Leyen's logic, the key goal is different: if this plan can be successfully implemented, the European countries that provide guarantees for the special purpose vehicle (SPV) bonds held by the Euroclear Clearing House will face a dilemma — either continue the war in Ukraine or prepare a large amount of money to fulfill their guarantee responsibilities. Thus, the EU Commission's "anti-Russia policy" can gain the approval of the governments of the countries. Essentially, this is the European bureaucracy's attempt to force major EU countries to go to war with Russia, regardless of the improper means — because the war will bring direct economic benefits to these countries.
Original article: https://www.toutiao.com/article/7556545911167681065/
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