The Kremlin issued a strong warning on Wednesday, stating it would pursue legal action against individuals and countries involved in the “theft” of frozen Russian sovereign assets in Europe. This comes as European leaders meet to discuss a proposal to provide Ukraine with a $165 billion loan, leveraging these very funds.
Dmitri S. Peskov, the Kremlin’s spokesman, explicitly equated using frozen Russian assets to back a loan for Ukraine with outright theft, making no distinction between the two approaches. “We are talking about theft,” Peskov declared during a call with reporters.
These remarks followed a decree signed by President Vladimir V. Putin, aimed at speeding up the redistribution of assets within Russia. Analysts suggest that Russia might retaliate against the European loan plan by seizing assets belonging to foreign companies and individuals from supporting nations. Russia has already taken control of several Western companies’ operations, as part of a broader economic reshuffling during the ongoing conflict.
Last year, Russian Finance Minister Anton G. Siluanov stated that Russia had frozen an equivalent amount of Western assets to what the West had frozen from Russia, promising a symmetrical response. Since the war began, Moscow has been depositing profits from Western assets held in Russia into special, state-frozen bank accounts.
European officials are increasingly looking to Russian frozen money more intensely as American aid to Ukraine diminishes under President Trump’s administration. The European Union’s executive body is developing a plan to offer an interest-free “reparations loan” of 140 billion euros (approximately $165 billion) to Ukraine. This financial strategy aims to utilize the Russian assets without directly confiscating them, with the loan only repayable if Russia provides war reparations. Britain is also considering a similar initiative.
Ursula von der Leyen, President of the European Commission, emphasized the need for a “more structural solution for military support” on Tuesday. She explained, “This is why I have put forward the idea of a reparations loan that is based on the immobilized Russian assets.”
She clarified that the loan would be disbursed in stages and would not involve the direct seizure of Russian assets. The Group of 7 nations has previously provided a loan to Ukraine, using the interest generated from the Russian assets as collateral.
The concept of further utilizing these assets has gained momentum following an initial proposal by von der Leyen and a similar one from German Chancellor Friedrich Merz. Merz faces growing domestic opposition from the far-right, who criticize him for allocating German taxpayer money to Ukraine. However, the Prime Minister of Belgium, where the majority of Russian assets are held, has expressed opposition to the plan, citing significant risks for his country.
Maria Shagina, a research fellow at the International Institute for Strategic Studies, called this a “very interesting geopolitical turn.” She added that given Trump’s isolationist foreign policy stance, “Europe needs to play ball and adopt another strategy.”
Russia’s Stance: A Firm Rejection of Asset Utilization
This shift in Europe’s approach represents an unwelcome development for Russia, particularly as President Putin has meticulously worked to ensure his nation’s financial stability over many years.
The approximately $300 billion of Russian sovereign assets frozen in Western countries, primarily within the European Union and Britain, constitute nearly half of the Russian Central Bank’s gold and foreign-exchange reserves, according to Russia’s Finance Ministry in 2022. Western nations froze these assets shortly after Russia’s full-scale invasion of Ukraine.
Russia seemingly views the proposed European financial maneuvering for the loan — which stops short of outright asset seizure — as a distinction without a meaningful difference.
Dmitri A. Medvedev, deputy chairman of the Russian national security council, declared on September 15 that Russia would relentlessly pursue EU states and “European degenerates from Brussels” who attempted to confiscate Russia’s property, vowing to do so “until the end of time” and “by every means possible.”
He asserted that Russia would target Europeans “in all possible international and national courts,” and, “in some cases, even out of court.”
Potential Russian Countermeasures: How Far Could Moscow Go?
Experts suggest that the Kremlin might retaliate by targeting European assets within Russia. This could include funds held in “Type-C accounts,” where Moscow has sequestered the Russian earnings of foreign entities and individuals since the West froze its sovereign assets. Foreigners require Russian government approval to withdraw funds from these accounts.
Moscow could also seize and sell off the assets and shares of foreign companies operating in Russia. Since the war began, Moscow has assumed control over the operations of several European companies in Russia, including the Danish beer producer Carlsberg.
Alexander Kolyandr, a nonresident senior fellow at the Center for European Policy Analysis, noted that Russia could mimic the European strategy by issuing a loan against the assets in Type-C accounts to bolster its constrained state budget. He estimated the total value in these accounts to be in the low tens of billions of dollars, though the exact figure remains unknown.
Another potential measure, Kolyandr explained, would be an accelerated, direct confiscation of property or shares owned by individuals and companies from the European nations supporting the loan to Ukraine. The Bell, an independent Russian online publication, has estimated that Western assets totaling hundreds of millions of dollars could be at risk.
In September, President Putin warned that any European action to appropriate Russia’s sovereign assets “would completely destroy all principles of international economic and financial activity, and would undoubtedly cause enormous harm to the entire global economy.”
During an appearance in Minsk, the Belarusian capital, in June, Putin stated that the West’s “theft” of Russia’s reserves would only accelerate the fragmentation of global financial systems. Russia has actively encouraged other nations to shift their trade away from dollars and euros and to develop payment systems immune to Western interference.
“There’s constant talk about how they’re planning to steal our money,” Putin remarked. “But once that happens, the movement toward regionalization of payment systems will accelerate and become, without a doubt, irreversible.”
He concluded, “Perhaps it’s worth paying for.”