ECB warns against seizing frozen Russian assets

The EU should not use frozen Russian assets in order to help rebuild Ukraine, the European Central Bank (ECB) vice president, Luis de Guindos, said in an interview with De Standaard and La Libre Belgique news outlets published on Wednesday.

According to the senior official, such an action could have serious implications for Europe’s single currency.

“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. The euro is the second most important currency in the world, and we have to consider its long-term reputation,” de Guindos warned.

He noted that while the ECB is “in favor of helping and supporting Ukraine in any way possible,” there are “other ways to finance the reconstruction of Ukraine.” De Guindos did not elaborate further.

He did not dismiss the idea of using frozen Russian funds entirely, however, saying that it “should be a global decision, ideally involving all members of the G7.”

The EU, US and their allies have frozen an estimated $300 billion worth of Russian sovereign assets and property belonging to Russian individuals and entities as part of a sanctions campaign against Moscow over its military operation in Ukraine. Western states have been mulling for months on how these funds could be confiscated and donated to Kiev, despite numerous warnings that such measures could jeopardize the credibility of the Western financial system and Western currencies.

Russia has repeatedly criticized the freezing of its assets as illegal under international law, describing it as theft.

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