Russia Warns Europe of Retaliation Over Frozen Assets

Russia has issued a stern warning to European Union countries against seizing frozen Russian assets, which currently total between $300-$350 billion, mostly held in European, US, and British government bonds. This warning follows reports that the European Commission, led by Ursula von der Leyen, is exploring a "legally creative" plan to use Russian cash deposits at the European Central Bank from maturing bonds to fund a "Reparations Loan" aimed at supporting Ukraine's defense. Former Russian president and current deputy chairman of Russia's Security Council Dmitry Medvedev declared that Russia will pursue any European states or EU officials attempting to seize these assets through all possible legal and extrajudicial means, describing such acts as theft that would undermine confidence in Western financial instruments. European nations argue that Moscow must be held financially accountable for the destruction caused by its invasion of Ukraine, while some bankers caution that confiscating sovereign assets could damage trust in government bonds globally. The EU has so far only used interest from the frozen assets to contribute to a €45 billion loan to Ukraine and is now looking for new ways to fund Kyiv’s war effort without direct expropriation. Medvedev has also threatened further territorial seizures in Ukraine and retaliation against British assets in response to the UK’s use of frozen Russian funds to supply weapons to Ukraine.