EU Implements Permanent Freeze on Russian Central Bank Holdings to Support Ukraine

Member nations of the European Union, including Belgium, have reached a consensus to implement an indefinite freeze on the assets of the Russian Central Bank that are held within Europe, as reported by Reuters and the Associated Press on Friday.

This action effectively eliminates a significant barrier to utilizing approximately 210 billion euros of Russian sovereign assets that are immobilized in Europe, to support Ukraine as Russia’s invasion enters its fourth year.

European Commission President Ursula von der Leyen stated on X, “We are sending a strong message to Russia that as long as this brutal war of aggression persists, the cost for Russia will continue to escalate.”

She also emphasized, “This serves as a powerful message to Ukraine: We want to ensure that our courageous neighbor becomes even more formidable both on the battlefield and at the negotiating table.”

Previously, the asset freeze needed to be renewed every six months, which made it susceptible to possible vetoes from Hungary and Slovakia, potentially allowing Russia to regain access to the funds.

Under the new proposal, the six-month renewal cycle will be replaced, requiring only a qualified majority of member states to approve any future renewals, according to Bloomberg.

Making the freeze indefinite is partially aimed at providing reassurance to Belgium, which holds the majority of the Russian assets, and securing its backing for an EU initiative to utilize those assets to offer Ukraine a loan of up to 165 billion euros, intended to cover military and civilian expenses for 2026-27.

Ukraine would only need to repay this loan after Russia pays reparations to Kyiv for the significant damage it has caused, as reported by Reuters.

EU leaders are anticipated to finalize the specifics of the reparations-backed loan, in addition to guarantees for Belgium in the event of Russian legal actions, during a European Council meeting in Brussels set for December 18.

In the meantime, the Russian Central Bank filed a lawsuit on Friday against Euroclear, which is based in Belgium, in a Moscow commercial court, alleging that it unlawfully obstructed the bank from accessing its own frozen assets and securities.

Separately, the Central Bank labeled the EU’s plans to utilize Russian assets to assist Ukraine as “illegal [and] in violation of international law,” asserting that these actions breach “the principles of sovereign asset immunity.”