Published by Global Banking & Finance Review®
Posted on October 6, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleEU's use of frozen Russian assets for Ukraine must follow international law, says ECB's Lagarde, emphasizing financial stability.
FRANKFURT (Reuters) -Any European Union decision on using frozen Russian state assets to help Ukraine must follow international law and the European Central Bank is "very attentive" to the process, ECB President Christine Lagarde said on Monday.
The EU is searching for a way to finance Ukraine's defence and reconstruction with some of the 210 billion euros worth of Russian sovereign assets immobilised in the West after Moscow's invasion of Ukraine in 2022.
As outright confiscation would be illegal, the bloc's political leadership is working on a plan to invest the Russian cash in zero-coupon bonds issued by the European Commission with guarantees from EU governments.
The EU would then use the cash to issue 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 is worried that a legally contentious move would damage the credibility of the euro and discourage investors from holding euro assets, potentially damaging 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," Lagarde said in a parliamentary hearing.
When the Russian assets were frozen at the outset of the war, the money was invested in bonds. Those bonds have now matured and the cash is stuck at the Euroclear central securities depository in Belgium.
Lagarde said any decision should be agreed by all the parties that hold Russian assets.
(Reporting by Balazs Koranyi; Editing by Chris Reese and Nia Williams)
The European Central Bank (ECB) is the central bank for the eurozone, responsible for monetary policy and maintaining price stability in the Euro area.
Frozen assets refer to funds or properties that have been legally restricted from being accessed or transferred, often due to legal or regulatory actions.
Financial stability refers to a condition where the financial system operates effectively, allowing for the smooth functioning of markets and the economy without significant disruptions.
A reparations loan is a financial arrangement intended to provide funds to a country for recovery and rebuilding efforts, often following conflict or disaster.
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