Euroclear Raises Concerns Over EU Plan Involving Frozen Russian Assets

Euroclear has voiced concerns regarding an EU proposal to back a 140-billion-euro loan for Ukraine utilizing frozen Russian assets. The depository warns this could lead to increased borrowing costs and damage to the European investment climate. Discussions are ongoing to address concerns.

Euroclear, the Belgian securities depository, has expressed serious concerns over an EU proposal that involves using frozen Russian assets to back a 140-billion-euro loan for Ukraine. According to a report in the Financial Times, Euroclear warned that member states might view this action as 'confiscation,' potentially leading to higher borrowing costs across Europe.

In a letter obtained by the FT, Euroclear further noted the risk to Europe's investment climate and possible increments in sovereign bond spreads. The depository currently holds about 185 billion euros in immobilised Russian assets while an estimated 25 billion euros are frozen in other EU countries such as France and Luxembourg. Financial Times claims Euroclear, represented by CEO Valerie Urbain, believes the proposal could provoke retaliatory actions and must be compensated against any legal challenges or financial repercussions.

Nevertheless, EU officials, including European Commission President Ursula von der Leyen, seem optimistic about addressing these concerns. During discussions, Belgian officials have voiced a desire for collective financial assurances from other EU countries. The Commission is preparing to present a legal structure for the loan plan, demonstrating a commitment to support Ukraine amid geopolitical tensions.

(With inputs from agencies.)