EU Freezes Russian Assets Indefinitely, Drawing Sharp Rebuke from Moscow

The European Union has agreed to freeze Russian sovereign assets indefinitely, marking a major escalation in its financial pressure campaign against Moscow and paving the way for the use of those funds to support Ukraine’s war effort. 

Russia’s central bank swiftly condemned the move as illegal, warning it would pursue all available legal avenues to defend its interests.

The decision was taken on Friday, December 12, following an EU meeting aimed at preventing any single member state, particularly Hungary or Slovakia, whose governments are seen as sympathetic to Moscow, from blocking the continued use of frozen Russian assets to aid Ukraine.

In a statement, the EU said it had invoked a special economic emergency procedure to maintain the freeze on Russian assets until Moscow ends its war against Ukraine and compensates Kyiv for the damage inflicted during nearly four years of conflict.

European Council President Antonio Costa said EU leaders had committed as early as October to keeping Russian assets frozen until Russia halts the war and pays reparations.

The move replaces the existing system, under which sanctions must be renewed every six months, with an open-ended freeze, a shift designed to provide legal and political certainty as Brussels moves closer to using the assets themselves.

The decision clears a critical hurdle ahead of an EU summit scheduled for next week, where leaders are expected to finalize plans to use frozen Russian central bank assets to back a large loan to Ukraine.

EU governments are seeking to mobilize around €210 billion ($246 billion) in frozen Russian sovereign assets, most of which are held at Euroclear, a Belgium-based clearing house. The funds would be used to guarantee a proposed €165 billion loan to Ukraine to cover both military and civilian budget needs in 2026 and 2027.

Under the plan, Ukraine would only repay the loan if and when Russia pays war reparations, effectively making the financing an advance on future compensation rather than a conventional debt obligation.

The indefinite freeze is also intended to reassure Belgium, which has expressed concern about potential legal and financial liability if Russia were to prevail in court challenges related to the assets held on its territory.

EU diplomats said negotiations are ongoing to ensure that all member states provide guarantees so that Belgium is not left bearing the costs alone. Germany has signaled it sees no alternative to the compensation loan and is prepared to provide guarantees worth €50 billion.

Denmark’s finance minister, Stephanie Lose, whose country currently holds the EU’s rotating presidency, acknowledged that “some concerns” remain but expressed optimism that leaders would reach agreement at the December 18 European Council meeting.

EU Economy Commissioner Valdis Dombrovskis said the European Commission was working on “strong guarantees” for Belgium and remained open to further adjustments to address its concerns.

Earlier on Friday, Russia’s central bank filed a lawsuit in Moscow against Euroclear, challenging its role in holding a large share of Russia’s frozen sovereign assets.

In a sharply worded statement, the Russian central bank said EU proposals to use its assets were “illegal” and constituted a violation of international law, including the principle of sovereign immunity.

“Any direct or indirect use of the Bank of Russia’s assets, or any other unauthorized form of use, is unlawful,” the statement said, adding that Moscow reserves the right to deploy “all available mechanisms” to protect its interests.

The asset freeze also featured in broader diplomatic discussions on Friday. Turkey’s presidency said President Recep Tayyip Erdoğan met with Russian President Vladimir Putin in Turkmenistan, where Erdoğan suggested that a partial ceasefire, particularly covering energy facilities and ports, could help de-escalate the conflict.

The two leaders discussed peace efforts, the EU’s decision on frozen assets, and Turkey’s readiness to host negotiations in any format, according to Ankara.