EU fearful of Russian retaliation following frozen assets confiscation

February 6,2024 500
EU fearful of Russian retaliation following frozen assets confiscation

European Union countries are wary of Russia’s retaliation in response to the confiscation of its assets. In particular, there is growing concern about possible cyber attacks from the Kremlin, according to Politico.

The G7 group of industrialized nations are considering a proposal to use these assets as collateral for bank loans that can finance Ukraine’s reconstruction, according to officials involved in the proceedings. These funds would be seized if Russia refuses to pay reparations after the end of the war,” journalists say. 

The proposal emerged against the backdrop of growing concern about a possible Moscow response to the complete confiscation of frozen assets, including potential cyber attacks on Western countries. 

Such a turn of events could tarnish the reputation of the Eurozone and make it less attractive to investors, fear officials in the EU. “We’re entering uncharted waters. Anyone would be worried about the potential consequences of asset confiscation,” said a European diplomat anonymously.

Moscow may also seek revenge by filing a barrage of appeals against the Belgian bank Euroclear, where most Russian reserves in Europe are held. According to a Belgian official, Russian companies have already filed 94 lawsuits in Russia demanding the return of funds from Euroclear after their investments and profits in Europe were frozen.

Earlier, Putin’s spokesperson, Dmitry Peskov, had threatened that Russia would retaliate for the confiscation of its frozen assets. He also mentioned that the same could happen to Western assets in Russia.

The assets confiscation plan could generate over €200 billion to support Ukraine’s postwar reconstruction, according to backers of the proposal. G7 countries are aiming to come up with a coordinated roadmap amid growing pressure from the United States, which, along with the United Kingdom and Canada, has fewer qualms than EU countries such as Germany, France and Italy,Politico stated.

Cover: Shutterstock

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