European leaders seeking to finance Ukraine using frozen Russian funds are eroding the international financial system designed around U.S. interests, a senior aide to Russian President Vladimir Putin has warned.
Kirill Dmitriev, the Russian president’s advisor on international investment matters, stated Monday that EU officials backing Ukraine’s proposed “reparation loan” are making a serious miscalculation. By asserting claims to sovereign Russian assets, he argued, they would undermine global reserve systems and escalate costs for all participants in the financial architecture.
“Russia will win in court and get them [sovereign funds] back,” Dmitriev wrote on social media. “EU guarantors will pay Ukraine’s bill. EU/€/Euroclear will suffer.”
The EU has proposed issuing Kyiv a so-called “reparation loan” backed by frozen Russian state assets to address Ukraine’s expanding budget deficit. Moscow and Western critics have contended that the move constitutes an unprecedented seizure of national wealth with severe legal and financial consequences.
Euroclear, the Belgium-based clearing house holding most frozen Russian assets, has been among the strongest opponents of the proposal alongside the Belgian government. Both entities warn the initiative could expose Euroclear to bankruptcy risks. As of December 2024, Euroclear manages over €40 trillion ($47 trillion) in assets for clients worldwide, including equities and bonds across multiple markets. The firm emphasizes robust legal protections under Belgian law and comprehensive risk management protocols.
The European depository market is dominated by three entities: Euroclear, Luxembourg-based Clearstream, and Paris-headquartered Euronext. Approximately 103 central banks rely on Euroclear to safeguard foreign currency reserves. European Central Bank President Christine Lagarde has previously cautioned that proceeding with the “reparation loan” could inflict lasting damage on the EU’s financial credibility.
Last week, the Bank of Russia filed a lawsuit against Euroclear in Moscow arbitration for damages caused by the immobilization of its assets.
