Baltics Renew Push for Seizure of Russian Frozen Assets

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(Bloomberg) — Lithuania is appealing to Germany’s new chancellor, Friedrich Merz, to come on board with a proposal to seize Russia’s immobilized central bank assets as the European Union debates ways to finance support for Ukraine.

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Lithuanian Foreign Minister Kestutis Budrys said he wants Berlin to demonstrate leadership and to tell partners to use about €200 billion ($225 billion) in assets that have been frozen in Europe before moving to a debate on how to share the responsibility for the consequences such a move would entail. 

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While the EU is already using the profits generated by the assets to finance assistance for Ukraine, it has balked at seizing them outright with France and Germany among countries warning that such a move could undermine the international role of the euro. 

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But a change in leadership in Berlin is likely to put the topic back on the table as Europe faces increasing pressure to take more responsibility for supporting Kyiv from the US administration of President Donald Trump. 

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Lithuania’s foreign minister said EU member states should be ready to share the risk of a potential fallout from seizing the assets with countries like Belgium, while putting more pressure on Russia and be ready to suspend Hungary’s voting rights in the bloc if it tries to torpedo efforts to help Ukraine. 

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“A strong message from Germany is needed for Europe and for the world,” Budrys said in an interview on the sidelines of an informal meeting of the EU’s foreign ministers in Warsaw. “We need a strong voice in front of us.”

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Employing the funds through loans or guarantees would help cover the costs of military aid to Kyiv for at least four years, Budrys said. The EU needs to set conditions that would keep assets frozen “until Russia pays all reparations and for all the damages done in Ukraine,” he said.

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The EU, the Group of Seven countries and Australia have frozen about $280 billion of Russian central bank assets in the form of securities and cash, mostly through the Belgium-based clearing house Euroclear. European officials have already been exploring more aggressive ways to use the assets to skirt around its potential legal and economic consequences.

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“If the risk is too big for one country where the assets are, like in Belgium — OK, I get it — let’s organize it in a multilateral way to take responsibility also for the consequences,” Budrys said.

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His comments were echoed by Estonian Foreign Minister Margus Tsahkna. Like-minded partner in the EU and at the G7, including Canada, the UK or Japan, should help share the risks that Belgium could potentially face, he said. 

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“We need to form some solution or a coalition which will take responsibility together with Belgium because we cannot leave them alone,” Tsahkna said.

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Keep the Assets 

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The EU sanctions that keep the Russian assets immobilized need to be renewed by unanimous vote every six months. Hungary has repeatedly threatened to veto the measures, before backing down on each occasion.