Moscow is preparing to confiscate the assets of “unfriendly” EU nations in retaliation if the bloc pushes ahead with a proposal to seize the profits from frozen Russian holdings, a high-level Russian official said on Sunday.
The warning from Vyacheslav Volodin, head of the lower house of Russia’s parliament, came after European Commission President Ursula von der Leyen on Friday said the EU executive is looking into sanctioned Russian state assets as a way to help worn-torn Ukraine rebuild. The move, she stressed, aligns with a previous political decision to hold Moscow accountable for Ukraine’s reconstruction following Russian President Vladimir Putin all-out invasion of the country.
Volodin, a Putin ally, made clear that if EU forges ahead with the proposal, Moscow’s reaction would inflict more economic pain on the EU than the other way round.
“A number of European politicians, led by the president of the European Commission Ursula von der Leyen, have once again started talking about stealing our country’s frozen funds in order to continue the militarization of Kyiv,” Volodin said in a statement onTelegram.
“Such a decision would require a symmetrical response from the Russian Federation. In that case, far more assets belonging to unfriendly countries will be confiscated than our frozen funds in Europe,” he said.
According to von der Leyen, an “actual proposal” should be presented in early December. EU finance ministers are looking into the principles that will underpin such a mechanism.
“We will present a proposal to find a way how to use the proceeds from those assets that are currently benefiting a limited number of financial institutions in the European Union,” she said. Most of the sanctioned assets are located in Belgium, with as much as €180 billion being held at Euroclear, the securities depository.
But the idea faces technical challenges, with the European Central Bank warning that tapping into these earnings could encourage other central banks to quit their euro-denominated assets, ultimately weakening the euro itself, the Financial Times reported.
The U.K., the U.S. are the G7 group of the biggest economies have all expressed support for the EU’s idea.