This decision was made in the context of active negotiations ahead of the EU summit scheduled for December 18–19 in Brussels.
In response to this move, the Russian Central Bank filed a lawsuit against Euroclear, an organization managing assets worth 185 billion euros. However, the European Commission dismissed the lawsuit, calling it "unfounded" and "speculative".
According to information from Euronews:
“Thus, assets under EU jurisdiction will remain frozen, despite concerns that the United States may attempt to gain control over them and use them in future negotiations with Moscow regarding the end of the conflict.
Legal Aspects
This measure became possible thanks to a decision by EU ambassadors, which was based on Article 122 of the Union treaties. It requires only a qualified majority of votes, allowing it to avoid the need for agreement with the European Parliament, and prohibits the return of assets amounting to 210 billion euros back to Russia.
The bulk of the frozen funds—185 billion euros—are held in Euroclear, the central securities depository in Brussels, while 25 billion euros are stored in private banks in France, Germany, Sweden, and Cyprus.
Previously, these funds were under standard sanctions requiring unanimous consent from all 27 countries, which created the risk of individual vetoes.
However, last week the European Commission decided to apply Article 122 to keep these assets inaccessible to Russia in the future. This article had previously been used to address emergency economic situations, such as the COVID-19 pandemic and the energy crisis.
Reasons for the European Commission's Decision
The European Commission, in its interpretation, asserts that the consequences of Russia's invasion of Ukraine have led to serious economic problems for the entire EU: supply disruptions, increased uncertainty, heightened risks, a decline in investments and consumer spending, as well as numerous hybrid attacks, including drones and disinformation.
“It is necessary to prevent the transfer of funds to Russia to limit the damage caused to the EU economy,” the statement said.
The frozen 210 billion euros will only be accessible when Russia's actions no longer pose a serious threat to the European economy and Moscow pays reparations to Ukraine without negative consequences for the European Union.
A new qualified majority will be required for unblocking.
“Article 122 allows for a more sustainable freezing of assets without requiring a review every six months,” noted a senior diplomat on condition of anonymity. “The European Council has already identified the need to keep the assets frozen until Russia pays for the war damages, making the application of Article 122 a logical step.”
Conflict with the USA and Support for Kyiv
Last month, media reports emerged about a 28-point plan developed by American and Russian officials to end the conflict in Ukraine.
Point 14 of this plan proposed using Russian assets for the commercial interests of both Washington and Moscow, but Western allies quickly rejected this idea.
Now, the frozen assets will allow the EU to more effectively counter external pressure and avoid unwanted vetoes from individual countries. (It remains unclear whether the USA wants the EU to proceed with the reparations loan issue).
Long-term freezing is a crucial part of the Commission's proposal to direct Russian assets towards a zero-interest reparations loan to support Ukraine, which Belgium, as the main custodian of the funds, actively opposes.
Current discussions among ambassadors concern legal texts, with meetings scheduled for Thursday, Friday, and even Sunday.
The main goal is to resolve as many issues as possible before the EU summit on December 18, where ways to raise 90 billion euros to meet Ukraine's budgetary and military needs for 2026 and 2027 will be discussed.
Belgium's Position
Belgium, as the main custodian of the funds, continues to resist the reparations loan. Prime Minister Bart De Wever presented dozens of pages of amendments to the legal texts, which, according to diplomats, complicates the process.
At a press conference in the Belgian parliament, De Wever expressed doubts about the necessity of this provision and the existence of an emergency economic situation justifying it.
“This is money from a country with which we are not at war,” he said. “It’s like we broke into an embassy, took all the furniture, and sold it.”
In response to the Commission's criticism, it stated that it is “reasonable” to argue that Russia's war has caused a shock to the European economy, which provides legal grounds for applying Article 122.
“Without the war, the situation in Europe would be noticeably more stable,” added a Commission representative.
Belgium's Demands
Despite its negative stance on the reparations loan, Belgium will agree to support it under three main conditions, as stated by De Wever.
The first condition is full risk-sharing among all member states.
The Commission proposed dividing guarantees into two tranches of 105 billion euros each to cover the 210 billion euros of Russian assets in the EU. However, Belgium insists on broader protection against any potential risks, including legal judgments.
Diplomats also suggest that the coverage amount may exceed 210 billion euros and be consolidated into one tranche to alleviate Belgian concerns. However, the proposal for indefinite guarantees, supported by De Wever, is considered unlikely.
The second condition is the availability of liquidity guarantees for Euroclear, where 185 billion euros of the frozen assets are held. Belgium is concerned that in the event of premature unblocking, Euroclear may fail to meet its legal obligations to the Russian Central Bank.
Nevertheless, the prohibition provided by Article 122 makes premature unblocking practically impossible.
The Commission also stated that it would provide loans to member states that cannot quickly raise funds to meet their obligations if they arise. (The European Central Bank has refused to provide such liquidity).
The third condition for Belgium is full burden-sharing, which implies the consolidation of assets of 185 billion euros in Euroclear and 25 billion euros in private banks in France, Germany, Sweden, and Cyprus.
While the European Commission aims to raise the entire amount of 210 billion euros, it remains unclear how far France, which holds about 18 billion euros, is willing to go. Confidentiality and secrecy remain paramount principles in the banking sector.
The Élysée Palace did not respond to Euronews' requests for comments.
De Wever warns that if the three conditions are not met and the EU still decides on the reparations loan, Belgium will file a lawsuit.
“If a decision is made that, in my opinion, clearly contradicts legality, it would be unreasonable and carry significant risks for our country. In this case, no actions can be ruled out,” the Prime Minister noted.
On Thursday, Budget Minister Vincent Van Peteghem stated that the country will be “very constructive” in negotiations but will not agree to a “reckless compromise.”
Diplomats agree that it is politically impossible to outmaneuver Belgium. If its demands are not met, the EU may attempt to issue joint debt of 90 billion euros, but Hungary is likely to veto this decision.
