ECB’s Lagarde Urges EU to Adhere to International Law When Utilizing Frozen Russian Assets for Ukraine
STRASBOURG – European Central Bank (ECB) President Christine Lagarde stated Monday that any European Union decision regarding the use of approximately €210 billion in frozen Russian state assets to aid Ukraine must be fully compliant with international law.
The EU is currently exploring mechanisms to finance Ukraine’s defense and reconstruction using the assets immobilized following Russia’s 2022 invasion. A leading proposal involves investing the funds in zero-coupon bonds issued by the European Commission, backed by EU government guarantees, and then issuing a “Reparations Loan” to Ukraine.
“We very much expect that any scheme that is discussed and eventually introduced at some point in time will be done in accordance with international rules, with international law,” Lagarde told European lawmakers in Strasbourg.
Lagarde expressed concern that a legally questionable move could undermine the credibility of the euro and deter investment in euro-denominated assets, perhaps impacting financial stability. “From my vantage point, and with in mind financial stability and the strength of the euro, we will be looking very attentively to make sure that what is proposed is in accordance with international law (and) is mindful of financial stability,” she said.
The frozen assets, initially invested in bonds that have since matured, are currently held at the Euroclear central securities depository in Belgium. Lagarde emphasized the need for agreement among all parties holding the Russian assets before any decision is made.
