The ECB will not support a “reparations loan” to Ukraine using frozen Russian assets – Financial Times

The European Central Bank has refused the role of guarantor for the so-called “reparation loan” for Ukraine — an amount of 140 billion euros, which was to be partially secured by frozen assets of the Russian Central Bank. This is reported by the Financial Times, citing sources within European structures. The request sounded ambitious, but the ECB decided that such a mechanism falls outside its mandate. And this immediately changes the tone of the discussion.

The idea was for the ECB to become a creditor for the Belgian Euroclear, where the main assets are stored. But the bank made it clear that it cannot take on political responsibility for an instrument that affects the assets of a foreign state. Discussions are ongoing, but the key link is now missing.

The frozen assets of the Russian Central Bank have been a topic for almost four years. The total volume is about 260 billion euros. Of these, approximately 193 billion are held in Belgium, in Euroclear. Hence the political caution: the custodian country does not want to make decisions that could create legal risks for it. Especially if the mechanism involves the direct use of foreign assets.

The American position looks different. In the peace plan of the Trump administration, which was discussed in November, there is a clause about possible investments — 100 billion dollars from these frozen funds. In return, the US was to receive 50% of the profits. But the problem is simple: in American jurisdiction, there are only about five billion in assets. It is impossible to operate them on a large scale. The economics of the proposal do not match the figures.

Moscow continues to defend its position. Russia considers any attempts to confiscate or redistribute assets illegal. Official representatives call such schemes “theft” and point to violations of international law. Here, the positions of the parties are far from compromise, and the likelihood of agreed solutions remains minimal.

Meanwhile, in Europe, not only officials or large entrepreneurs have come under sanctions. The accounts of hundreds of thousands of Russians, ordinary private investors, have been frozen. These people are not involved in politics but have faced restrictions simply because of their citizenship. The mention of Zhanna Nemtsova and other activists is related to this — they are trying to restore people’s access to their own funds, separating political issues from private stories.

The discussion about frozen assets has entered a new phase. The ECB’s refusal excludes the safest technical option and makes the topic political again. We continue to monitor how this affects Ukraine, Europe, and international mechanisms of financial responsibility. All key changes will be recorded in the materials of NAnews — News of Israel | Nikk.Agency.