The European Union is unlikely to seize Russian central bank assets currently frozen in Europe, despite plans by industrialized nations to discuss the legality of such a move at a meeting of G7 leaders in February, several officials told Reuters. Europeans

After President Vladimir Putin moved his army into Ukraine in February 2022, the US and its allies banned transactions with the Russian Central Bank and the Russian Ministry of Finance, freezing some 300 billion of Russian sovereign assets in the West in dollars. About 200 billion dollars of these assets are kept in Europe, mainly in the Euroclear clearing house in Belgium, Agerpres notes.

Confiscating Russian assets and handing them over to Ukraine would reduce pressure on the West to finance Ukraine’s military actions, but European officials reject this option as too risky from a legal point of view.

“There will be no capital confiscation of Russian assets. There is no agreement between EU member states on this matter,” said a senior official close to the file, who spoke on condition of anonymity.

In an interview with Reuters, Luxembourg Foreign Minister Xavier Bettel said he was “very cautious” about seizing assets.

“Imagine if we at the political level decided to give billions to Ukraine, and six months later we have a court decision saying that we had no right to give them. Who will pay then?” he said.

European officials are concerned about both the legality of such an unprecedented seizure of sovereign assets and the potential fallout for the euro, as investors may abandon euro assets over fears that their money could be seized within a day. In addition, Moscow promised in response to confiscate Western assets in Russia, the value of which is estimated at 288 billion dollars.

Belgian Finance Minister Vincent van Peteghem, whose country holds the EU presidency until July, is very reluctant to consider confiscating Russian assets.

“We have to be very careful with this proposal. I think it is important that what we propose is legally sound and we must avoid any impact on financial stability,” van Peteghem said.

European officials quoted by Reuters say Euroclear has “significant” assets in Russia that could be seized by Moscow, putting the clearing house’s financial stability at risk with serious consequences.

“The EU will not be able to save Euroclear from bankruptcy. It disposes of thousands of billions, and its bankruptcy would be more important than the EU budget. We have to balance risks and returns,” said a European official quoted by Reuters.

Instead of confiscating Russian assets, EU governments are likely to support a European Commission proposal tabled in December that would take only profits from frozen Russian assets, leaving the principal intact. According to officials, this option could receive about 15-17 billion euros in four years, which could be transferred to Ukraine.

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