Europe’s biggest powers are swinging behind efforts to seize more than €200bn of frozen Russian assets, as they draw up plans for a ceasefire deal in Ukraine.
France and Germany, long opposed to a full-blown seizure of the assets held in the EU, are discussing with the UK and other countries ways in which they could be used.
French officials have discussed a proposal for European capitals to seize the assets if Moscow were to violate a future ceasefire deal in Ukraine, said three people briefed on the talks, as part of efforts to provide post-conflict security guarantees for Kyiv.
Proponents of the ceasefire link see it as a way to hold Russia to any agreement and provide Kyiv with a guarantee.
The talks come amid a flurry of European diplomatic efforts, led by France and the UK, to devise a peace plan for Ukraine, sparked by US President Donald Trump’s decision to open bilateral negotiations with Moscow aimed at ending the war.
G7 allies froze about €300bn in Central Bank of Russia assets in 2022 after Moscow’s full-scale invasion of Ukraine, of which the vast majority — some €190bn — sit in Belgium’s central security depository Euroclear, with smaller amounts held by France, the UK, Japan, Switzerland, and the US.
Currently, the income generated by these assets — mostly cash and government bonds — is being used to repay G7 nations for $50bn worth of loans to Ukraine, but the underlying assets are not being touched.
Countries including Ukraine, Poland and the Baltic States have long pushed for the seizure of the underlying assets, but key capitals, including Berlin, Paris and Brussels, have previously pushed back because of concerns that seizing state property would set a precedent under international law.
The European Central Bank was also worried that the euro’s status as a safe option for foreign reserves would be put at risk. Most of the assets are denominated in euros.
During talks with Trump last week, Emmanuel Macron, president of France, said seizing the assets immediately would not be “respecting international law” but the money could be “part of the negotiation at the end of the war”.
Germany’s chancellor-in-waiting Friedrich Merz has indicated he would consider backing a proposal involving seizing frozen Russian assets, said a person familiar with the matter. Merz is speaking with caretaker chancellor Olaf Scholz on Wednesday to align positions ahead of a summit of EU leaders on Thursday. A spokesperson for Scholz declined to comment.
UK Prime Minister Sir Keir Starmer on Monday said London was looking at how the assets might be deployed. “Obviously the proceeds and profits are being used,” he told MPs, speaking after signing a deal with Volodymyr Zelenskyy, Ukraine’s president, at the weekend for the UK to lend £2.26bn to Ukraine backed by profits from sanctioned Russian sovereign assets.
“On the [underlying] assets themselves, it’s a very complicated issue. It’s not straightforward,” Starmer added. “But I do think we need to do more, and we are doing more work to look at what the possibilities are at least, along with other countries.”
Two of the people familiar with the French proposal said it had been well received by other European allies, but that it was far from being agreed. A spokesperson for Macron declined to comment.
The camp in favour of seizure has been given impetus by the Trump administration’s threat to pull military support to Ukraine. “More and more countries are willing to use [frozen asset seizure] as leverage,” said one person.
