LONDON: The use of immobilized Russian assets for a reparations loan for Ukraine risks pushing European debt costs higher, Euroclear warned...
LONDON: The use of immobilized Russian assets for a reparations loan for Ukraine risks pushing European debt costs higher, Euroclear warned in a letter to European Commission President Ursula von der Leyen and EU Council President Antonio Costa seen by the Financial Times (FT).
According to the Brussels-based central securities depositary, such a mechanism would be perceived as "confiscation" outside the European Union and spook investors, the newspaper wrote. The loan plan would damage the investment climate in Europe "as investors, particularly sovereign wealth funds and central banks, will perceive this initiative as being equivalent to confiscation of central bank reserves, undermining the rule of law," Euroclear chief executive Valerie Urbain argued in the letter. Besides, such actions will lead to "compensatory payments by [EU] member states to Euroclear," the British newspaper quoted her as saying.
Belgium, where Russian assets worth 200 billion euros are frozen at Euroclear, blocked the European Commission’s proposal to expropriate them under the guise of a so-called reparations loan to Kiev at the October 23 EU summit. The Belgian government is demanding legally binding guarantees from all EU countries that they will fully share the financial and legal burdens Brussels would face as a result of Russia’s retaliatory actions.
Russian Ambassador to Belgium Denis Gonchar told TASS earlier, regardless of the scheme used to expropriate the assets, it would amount to theft. He warned that Russia’s response "would follow immediately" and force the West "to count the losses."
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