EU countries fear Russian retaliation and cyberattacks after confiscation of its assets

, 6 February 2024, 07:59

Concerns are growing in the EU about Moscow's possible retaliation for the confiscation of its frozen assets.

As reported by Politico, the G7 group of industrialised nations is considering a proposal to use these assets as collateral for bank loans that could finance Ukraine's recovery, according to officials involved in the talks.

These funds would be levied against if Russia fails to pay reparations after the war.

The proposals come amid growing concerns about Moscow retaliating against a full-scale confiscation of its frozen assets, such as by launching cyberattacks against Western nations.

Several European officials who participated in the discussion stated that this could provoke counter-sanctions against European assets in Russia. This is on top of warnings that it could tarnish the reputation of the Eurozone, making it less attractive to investors.

"We’re entering uncharted waters. Anyone would be worried about the potential consequences of asset confiscation," said the EU diplomat, speaking on condition of anonymity.

The asset seizure plan could raise more than €200 billion to support Ukraine's post-war reconstruction, according to supporters of the proposal. The G7 countries are seeking to develop a coordinated roadmap amid growing pressure from the United States, which, along with the UK and Canada, has fewer reservations than EU countries such as Germany, France and Italy.

Europe fears that Moscow could retaliate by filing a flow of appeals against Euroclear, the Belgian financial depository that holds the vast majority of Russia's reserves in Europe.

According to a Belgian official with knowledge of the proceedings, Russian companies have already filed 94 lawsuits in Russia demanding the return of funds to Euroclear, which operates under Belgian law, after their investments and profits in Europe were frozen.

Kremlin spokesman Dmitry Peskov said in December that Russia would retaliate against the confiscation of its frozen assets. Without going into details, he suggested that the same could happen to Western assets in Russia.

Earlier, at a meeting on 29 January, EU permanent representatives agreed to set up a separate account to which the interest from taxed income of frozen Russian assets would be transferred.

Last month, EU foreign ministers reached a political agreement on a plan to use Russian assets to support Ukraine.