Moscow, Russia — The Russian Federation issued a direct ultimatum to the European Union this week, promising an unannounced and forceful response should the bloc proceed with plans to seize frozen Russian financial assets for the support of Ukraine. Russian Foreign Ministry spokesperson Maria Zakharova delivered the scathing warning on Thursday, stating that the EU should anticipate a retaliatory measure that would catch them off guard, though she withheld specifics regarding the nature of the potential action.
The announcement came amid escalating discussions within the EU regarding the utilization of immobilized Russian capital. This diplomatic friction intensified following the revised proposal put forth by European Commission President Ursula von der Leyen on Wednesday. The updated plan seeks to direct a significant portion of these frozen funds toward Ukrainian recovery and defense efforts.
EU Weighs Reduced Assets Proposal
Originally, estimates of the sequestered Russian state and private funds totaled up to $186 billion. However, the most recent proposal scales back the targeted sum to approximately $105 billion, reflecting operational and political hurdles.
Zakharova did not mince words, also turning her criticism toward von der Leyen, characterizing the Commission President’s conduct concerning the asset seizure as “inappropriate.” The debate centers on the complex legal and financial implications of converting these sovereign assets into direct aid, a move unprecedented in international finance.
Deep Legal and Financial Concerns Emerge
While Brussels attempts to forge a unified front, the effort has revealed significant internal resistance within the EU. Notably, Belgium has voiced strong opposition to the plan, citing unresolved legal ambiguities and substantial financial risks associated with the transfer.
The sensitivity surrounding the issue is amplified by Belgium’s role as the primary custodian of a vast majority of these frozen assets. The international securities depository, Euroclear, which holds the bulk of the immobilized Russian funds, is headquartered in the Belgian capital. Experts argue that moving forward without addressing these legal challenges could set a hazardous precedent, potentially destabilizing international investor confidence in custodianship and sovereign immunity norms.
Should the EU decide to move forward with the confiscation, observers anticipate Russia’s retaliation could involve seizing or nationalizing Western corporate and state assets currently within Russian jurisdiction, targeting diplomatic or commercial relationships, or initiating complex and lengthy legal battles in international courts. The global financial community is closely monitoring the situation as the final decision on the assets could significantly reshape the future of international sanctions policy and cross-border finance.