The European Central Bank refuses to support Ukraine’s financing plan with Russian assets

2025/12/03 6:09:34 AM

2 minutes read

The European Central Bank refuses to support Ukraine’s financing plan with Russian assets

The bank announced The European Central Bank said it could not support an EU plan to use Russian assets are frozen to finance Ukraine, raising further doubts about a move to approve the plan this month.

The European Commission and several member states are pushing for the bloc to use the frozen assets of the Russian Central Bank to provide a loan worth 140 billion euros ($162 billion) to Kiev to fill expected budget gaps.

But Belgium, which hosts the International Depository Organization, "Euroclear" Where the bulk of the assets are located, the initiative resisted for fear of retaliatory legal measures from Moscow.

It called for guarantees from other EU countries to share risks.

Avoiding a liquidity crisis

But according to the newspaper "Financial Times" The European Commission is concerned that countries will not be able to raise funds quickly enough in the event of any emergency.

It asked the European Central Bank whether it could play the role of lender of last resort."Euroclear" To avoid a liquidity crisis, the newspaper reported, citing people briefed on the discussions.

But the central bank of the 20-country euro zone said that would be impossible.

Ban monetary financing

A European Central Bank spokesman told AFP that they "They would not consider such a proposal given that it would likely violate treaties banning monetary financing"

The European Central Bank concluded that the Commission’s proposal would amount to… "Cash financing" It provides direct financing to governments, and will also cover the financial obligations of member states, according to "Financial Times".

This practice is prohibited under the European Union treaties.

A spokeswoman for the Commission stated in a press conference that in light of the position of the European Central Bank "We are in talks about how to ensure this liquidity, actually looking at alternative solutions"

The central bank’s position deals a new blow to the plan’s supporters, who are pressing for an agreement in this regard during the European Union leaders’ summit scheduled for December 18.

Providing binding guarantees

Belgian Prime Minister Bart de Wever said last week that he would not approve the plan unless binding guarantees were provided. "It is signed by member states when a decision is reached"

Claims have increased in the European Union to benefit from Russian assets after the United States plan to stop the war in Ukraine was recently presented, and indicated the need to lift the freeze on the assets.

Supporters of the move insist that unless the bloc moves now to use the funds, it risks losing control over them under a possible US-backed peace agreement.