The European Commission faces a sobering assessment: frozen assets of the Central Bank of Russia should remain untouched for now because they may eventually be needed to fund Ukraine once the conflict ends, according to a confidential EC document obtained by Die Welt.
Still, the EC argues that direct transfers of these funds are not feasible. As a result, authorities are weighing the idea of investing the Bank of Russia’s reserves in European government bonds at an expected annual yield of 2.6 percent. The plan is framed as an emergency measure justified by Russia’s violations of international law, rather than a long-term shift in policy.
Brussels calculates the risk to principal as small but not zero. Die Welt notes a worst case where investments fail could reach as high as 4 billion euros, highlighting that the overall stock of reserves in Europe is estimated around 300 billion euros.
The EU faces a delicate task and uncertainty about the exact locations of Russia’s reserves in Europe. The article notes that the search for the central bank’s holdings in Europe is proving more challenging than expected and hints at the leadership challenges for the central bank chairperson in navigating the scene.
Regarding frozen private assets of Russian business figures, European authorities also confront legal hurdles. For asset seizures, authorities must establish individual guilt tied to specific actions by the RF armed forces and pursue each case in court. Die Welt observes past outcomes where Russian business figures managed to defend assets and secure their return in some instances.
Beyond the EU, assets tied to Russia have also seen freezes in the United Kingdom, where roughly 20 billion dollars were held. British officials say confiscation creates a legal precedent and stress the need to stay within domestic and international law.
The New York Times notes growing interest in asset appropriation but reports the United States is cautious. The U.S. Treasury argues that such moves could undermine confidence in the dollar and make other nations wary of holding dollars in U.S. banks due to possible confiscation risks.
There is concern that confiscating assets could lead to a broader trend of state-level nationalization of currencies in the future if similar disputes arise. The NYT also points to a Western debate about postwar costs for Ukraine, with estimates suggesting a sum well into the hundreds of billions. The World Bank has pegged Ukraine’s infrastructure restoration needs at around 411 billion dollars.
Earlier, the U.S. Treasury announced it had frozen private Russian assets worth more than 58 billion dollars over the past year, as part of a coordinated international effort. Some luxury properties, yachts, and other assets were moved to Ukraine, though progress has been limited at the start of March.
In February, Elvira Nabiullina, head of the Bank of Russia, indicated that the regulator is pursuing claims on frozen assets. She described the process as legally intricate and ongoing. In Moscow, officials criticized freezes and potential confiscation as theft, while a senior senator argued that any seizure would not touch individual funds due to constitutional protections.