(C) Eurones.com
JOHANNESBURG—Russia has issued its most vehement warning yet against the European Union’s proposed plan to utilize Moscow’s frozen assets to fund a massive loan package for Ukraine. The Kremlin pledged the "strongest possible response" to any move it deems illegal, deepening the already severe diplomatic and financial standoff.
On Thursday, Maria Zakharova, the spokesperson for the Russian Ministry of Foreign Affairs, directly addressed reporters, stating unequivocally: "Any unlawful steps taken by the European Union regarding our frozen assets will be met with the strongest response." The threat underscores Russia’s view of the plan as nothing less than outright financial theft. "Illegal actions surrounding our assets will definitely come at a price," Zakharova asserted, according to a report by Reuters.
She also revealed that Russia is actively preparing counter-measures. "We are already preparing a set of reciprocal actions in case the assets of the Russian Federation are actually stolen or confiscated," she added, signaling that Moscow is ready to engage in financial retaliation if the EU proceeds.
The EU's 'Reparations Loan' Proposal
The Russian warning follows the EU’s formal announcement of a legal proposal the day before, outlining a plan to support Ukraine through a "reparations loan," leveraging the substantial Russian state assets currently immobilized within Europe.
Ursula von der Leyen, President of the European Commission, confirmed that the funds for this support would be sourced either through joint EU borrowing or, more controversially, by utilizing the profits or assets of the Russian Central Bank that have been frozen within the bloc.
Internal Opposition and Legal Hurdles
However, the EU's ambitious plan is far from consensus. Significant friction has emerged from within the Union itself, particularly from Belgium, where the majority of Russia's frozen assets are held in the international securities depository, Euroclear, headquartered in Brussels.
Belgium has repeatedly voiced its opposition to the specific method of utilization, citing deep concerns over its legality. Crucially, the Belgian government is demanding assurances that legal liability will be shared among all EU member states should the measure face legal challenges. This internal resistance highlights the complexity and potential legal pitfalls of the EU's proposal.
Zakharova seized on this division, mocking the internal EU debate. Reuters reported that she "ridiculed the escalation of debate within the EU," suggesting that "rational forces within the EU are trying to block this illegal scheme."
Should the EU proceed with the proposal, it would set an unprecedented international legal and financial precedent. While the West views the measure as a necessary mechanism for making Russia pay for the destruction it has inflicted upon Ukraine, the Kremlin is framing it as a breach of international law and a justification for severe counter-sanctions. The ensuing "asset war" could escalate tensions and introduce further unpredictability into the global financial system. The coming weeks will determine whether the EU can overcome its internal disputes and legal hurdles, and what form Russia’s promised "strongest response" will ultimately take.
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