Valérie Urbain, the chief executive of Euroclear, has emphasized that Russia’s frozen state assets in the EU should be utilized as leverage in peace negotiations concerning Ukraine, rather than being allocated to a complex reparations loan of €165 billion for Kyiv. Speaking to Belgian broadcaster VRT, Urbain stated, “At this stage, it would be better to use that money for peace negotiations, rather than setting up an extremely complex and risky legal structure and then losing that leverage in the talks.”
The backdrop of the reparations loan proposal
Urbain’s remarks come in light of a recent proposal by the European Commission for a reparations loan, which was unveiled just two weeks prior to a pivotal EU leaders’ summit in Brussels. With Ukraine’s war financing projected to deplete by April, European leaders face a critical decision: should they utilize the sanctioned funds from the Kremlin to support Kyiv’s survival or rely on taxpayer contributions to sustain the ongoing war effort?
Alternative perspectives on asset utilization
U.S. envoy Steve Witkoff has also weighed in, suggesting that the frozen assets could be redirected towards American-led reconstruction initiatives, contingent upon the establishment of a ceasefire. According to an initial 28-point peace plan, the U.S. would claim “50 percent” of the profits generated from this approach. However, this plan faced significant backlash from European counterparts, leading to its revision, yet it appears to be struggling to gain acceptance from Moscow.
Concerns regarding the reparations loan have emerged from the Belgian government, led by Flemish nationalist Bart De Wever, who fears that such a loan could provoke retaliation from Russia. De Wever is advocating for financial guarantees from EU capitals that would allow for immediate payouts should Moscow seek to reclaim the funds.
As Euroclear holds a substantial portion of the frozen Russian assets, Urbain highlighted that the financial risks associated with connecting these assets to the reparations loan could be detrimental. She warned that Euroclear’s potential bankruptcy from this initiative might not only diminish the attractiveness of the European market but also destabilize the global financial landscape.
In response to Belgium’s hesitations, the Commission has indicated that their proposals aim to alleviate many of the concerns raised by both the Belgian government and Euroclear. Nevertheless, De Wever remains unconvinced. Tonight, Commission President Ursula von der Leyen and German Chancellor Friedrich Merz are scheduled to meet with the Belgian premier in an effort to secure his support for the proposed plan.