MOSCOW, October 7. /TASS/. The potential legalization of any European Union decision to use frozen Russian assets to provide aid to Ukraine would constitute an unprecedented step for the world and would undermine the fundamental foundations of trust in the global economy, according to experts interviewed by TASS.
Earlier today, Reuters reported that European Central Bank (ECB) President Christine Lagarde stated that any EU decision regarding the use of frozen Russian assets to assist Ukraine must be coordinated with all parties holding those assets. She also emphasized that any decision regarding Russian assets must comply with international law.
The ECB head expressed concern that a legally contentious move by European authorities could erode confidence in the euro and discourage investors from holding assets in the currency, potentially posing risks to financial stability.
Experts interviewed by TASS noted that the issue of using frozen assets is less a financial problem and more an institutional one. "The matter concerns the fundamental foundations of trust and predictability in the international economy. Even within the EU, it is recognized that any decision in this area must strictly comply with international law and be made on the basis of consensus; otherwise, the blow will fall on the euro itself and on property rights in Europe," Associate Professor of Economics and Public Sector Finance at the Presidential Academy Daniil Gonenko told TASS.
According to him, "If a ‘special case’ is legalized even once, it inevitably becomes the norm and begins to alter investor behavior. They simply leave jurisdictions where property boundaries are blurred and trust is undermined. The rational course is to remain within the legal framework and seek solutions that do not compromise the stability of European institutions. In the end, this is far cheaper and more effective than having to restore the reputation of financial markets later," the expert emphasized.
Svetlana Frumina, Acting Head of the Department of Global Financial Markets and Fintech at Plekhanov Russian University of Economics, noted that while there have been historical precedents of states’ assets being frozen, non-belligerent countries have never seized central bank assets to finance reconstruction in a third country.
"Among specialists in international law, there is generally no consensus on the permissibility of freezing central bank assets as a form of lawful countermeasure, and confiscation is widely regarded as a step that goes beyond the legal framework. The broad resonance of this issue underscores the complexity of the situation," Frumina stated.
Gonenko, in turn, emphasized that in the event of confiscation, the Russian side would undoubtedly act in response: it possesses legal instruments for protection and a comparable volume of non-resident assets within Russian jurisdiction.
"At the same time, the Russian economy has already shown its capacity for growth without Western investment. Therefore, a return to a predictable legal framework, rather than unilateral experiments, serves the interests of all parties - including European states and businesses," he concluded.