BELGIAN SECURITIES depository Euroclear warned that a European Union (EU) plan to back a €140-billion loan for Ukraine with frozen Russian assets could be viewed as “confiscation” and increase borrowing costs for member states, the Financial Times (FT) reported on Thursday.
Euroclear said the proposal risks damaging Europe’s investment climate and raising sovereign bond spreads, according to a letter seen by the FT.
Reuters could not immediately verify the report. Euroclear did not immediately respond to a Reuters request for comment.
The depository holds about €185 billion ($215 billion) of Russian assets immobilized in Belgium, while an estimated additional €25 billion of Russian state assets are frozen in EU banks in various countries, mainly in France and Luxembourg.
European Commission President Ursula von der Leyen told the parliament on Wednesday that the commission is ready to present a legal text on the loan plan supporting Ukraine’s efforts.
Euroclear Chief Executive Officer Valerie Urbain said the plan could lead to retaliation and potential legal challenges and urged that Euroclear should be covered for such action, the FT report added.
Belgium raised similar concerns, saying that it wants other EU countries to guarantee it would not be left alone to cover the expense and financial fallout which may stem from this scheme.
Although EU leaders failed to agree on the loan at their October summit, officials close to the talks between the commission and Belgium are confident that all concerns can be addressed. ($1 = 0.8618 euros). — Reuters
