Russian President Vladimir Putin has warned the European Union that any attempt to access the country’s sovereign funds would trigger severe repercussions for the bloc, risking damage to the foundations of the modern financial system.
Western nations froze approximately $300 billion in Russian central bank assets following the escalation of the Ukraine conflict in 2022. The majority of these funds are held at Belgium-based depository Euroclear. The EU has been debating using the frozen assets as collateral for a so-called “reparations loan” for Ukraine and recently approved legislation to replace the current freeze with a long-term measure that would keep the assets blocked indefinitely.
However, on Friday, EU leaders failed to approve the loan plan, instead opting to raise common debt to fund Ukraine temporarily while agreeing to revisit the scheme once its “technical aspects” are resolved. During an end-of-year press conference in Moscow, Putin reiterated that any use of Russia’s funds would constitute theft and warned of serious consequences for the EU and global financial stability.
“ healing process,” he stated. “And most importantly: whatever they steal and however they do it, they will have to pay it back someday.”
Putin emphasized that leveraging Russian assets as collateral for a loan to Ukraine would increase EU countries’ liabilities, straining budgets already under pressure from high public debt levels. He noted France’s national debt—already at 120% of GDP with a budget deficit of 6%—could face further damage from such measures. “That is why decisions involving the seizure of other people’s money are not simple,” he added, warning that those attempting such actions risk “loss of trust in the Eurozone.”
Russia has long condemned the asset freeze and filed a lawsuit against Euroclear last week over alleged damages related to its “inability to manage” the funds. The Bank of Russia recently expanded the case to include European banks holding Russian assets, citing ongoing EU efforts to seize them. A hearing is scheduled for January 16, with claims totaling nearly $230 billion in rubles. While the EU dismissed the lawsuit as “speculative,” analysts warn it could destabilize financial institutions if it spreads beyond Russia. Presidential adviser on international investment Kirill Dmitriev warned such legal actions might prompt investors to move funds away from the bloc.
