The Biden administration will be unable to implement a scheme to use frozen Russian assets for supporting Ukraine without a European go-ahead, the Washington Post has cited unnamed sources as saying.
The sources claimed that only about two percent of those funds are held inside the US, and that most of Russia’s frozen assets are in Belgium or Switzerland.
"There is resistance in Europe, especially in Berlin, about whether the move is justifiable under international law and whether it might undermine confidence in the euro," the insiders pointed out, singling out Europe’s "divisions on this issue."
They also insisted that "without European buy-in, the [Biden administration’s] plan [on frozen Russian assets] won’t work. That’s true." The Washington Post noted in this regard that "without Russia’s seized assets, Ukraine could lose its ability to survive as a functioning country."
This comes after a UK newspaper reported that some European countries, including Italy, which takes over the G7 presidency in 2024, were wary of Washington’s plans to confiscate frozen Russian assets, fearing retaliation from Moscow and the potential consequences for global financial stability.
The recent developments stem from comments made by Luis de Guindos, Vice-President of the European Central Bank (ECB), when speaking to the press. He warned that the possible use of frozen Russian assets to bankroll Ukraine by Europe could tarnish the euro's reputation.
"Our position on utilizing the dividends and interest from the frozen assets is clear. First: this should be a global decision, ideally involving all members of the G7. In addition, we have to be careful because this could lead to reputational damage. We have to look beyond this conflict in isolation, and there could be implications for the euro as a safe currency," de Guindos emphasized.
Kremlin Spokesman Dmitry Peskov last week warned that Western countries would face repercussions if they used Russia's frozen assets to assist Ukraine.
"Those who are trying to initiate this, and those who will implement it, must understand that Russia will never leave those who did this alone. And it will constantly exercise its right to a legal battle, internationally, nationally or otherwise. And this, of course, will have — both Europeans and Americans understand this very well — it will have legal consequences for those who initiated and implemented it," Peskov told reporters.
Following the start of Russia's special military operation, the US-led West slapped widespread sanctions on Moscow, including freezing Russian assets worth approximately 300 billion euros ($329 billion). The bulk of this sum, approximately 200 billion euros ($221 billion), is being held in the European Union, predominantly in accounts at Euroclear, a European central securities depository.