MOSCOW, December 8. /TASS/. Blocking or confiscating Russian assets in Europe would hurt the euro, lead to an outflow of capital from a European Union that no longer protects private property rights, and set a precedent that undermines the consensus-based foundation of the EU's common foreign policy, all while seeing Russia's resilient and independent economy weather the storm, experts interviewed by TASS said.
"The issue of using frozen assets is not so much a financial problem as an institutional one. This refers to the fundamental foundations of trust and predictability in the international economy. Even within the EU, they acknowledge that any decision in this area must strictly comply with international law and be taken on the basis of consensus, otherwise the euro itself and property rights in Europe will take a hit," Associate Professor of Economics and Public Sector Finance at the Presidential Academy Daniil Gonenko said.
In the event of confiscation, the Russian side will certainly take mirror action: it has legal protection tools at its disposal and a comparable volume of non-resident assets located in the Russian jurisdiction, he noted.
"That said, the Russian economy has already demonstrated its ability to grow without Western investment. Therefore, a return to a predictable legal framework, rather than unilateral experiments, meets the interests of all parties, including European states and businesses," Gonenko said. "As an economist, I operate from a simple principle: once a 'special case' is legalized, it inevitably becomes the norm and begins to change investor behavior. They simply flee jurisdictions where property boundaries are blurred and trust is undermined," he stressed.
The rational solution is to remain within the legal framework and seek solutions that do not undermine the stability of European institutions, which is ultimately cheaper and more effective than trying to restore the reputation of financial markets later, the expert noted.
A dangerous pattern threatens EU unity
An EU decision to freeze Russian assets without meeting the unanimity requirement would mark a fundamental shift in the mechanisms for making foreign policy decisions within the Union, Anna Fedyunina, Assistant Professor of the Faculty of Economic Sciences at HSE University said.
"By doing this, the coalition of member states' readiness would be going all in on restraining Russia, even at the cost of weakening the EU's institutional integrity. The only question is won't this ultimately lead to the end of the EU? After all, such a precedent could not only undermine the consensus-oriented basis of the EU's common foreign policy, but also create a dangerous pattern: in the future, such loopholes could be used for other controversial decisions promoted by a narrow coalition of countries, bypassing formal procedures," she said.
According to the Financial Times, the European Union has found a loophole that could help to permanently block Russia's frozen assets, circumventing the rule requiring unanimous approval from all EU countries.
Until now, there was a risk that sanctions would be renewed by unanimous vote every six months, meaning that a single capital, such as Budapest, could restore Moscow's access to assets and bring the entire structure down. The new legislation aims to change this. Brussels has found a clause in the EU's founding treaties that, in the face of serious economic upheaval, will allow measures to be taken without the need for unanimous approval, according to the publication.
The Financial Times notes that such shocks could include actions by Russia, which the West accuses of hybrid actions against the EU, in light of which it is proposed to block Russian assets for an indefinite period until a similar separate decision is made to lift the ban.
The European Commission previously announced its plan to expropriate all frozen Russian assets in Europe worth 210 bln euros under the guise of a reparations loan scheme to finance Ukraine in 2026-2027. It also called on non-EU Western countries to join this initiative.