If Russian assets held in Europe are seized, clients of Belgian depository Euroclear alone risk losing €16bn of funds held in Russia, Guillaume Elie, chief executive of the financial risk firm, told AFP.
He believes that the security guarantees offered by the European Commission do not allay Euroclear's concerns, and the seizure of Russian Central Bank assets alone will show international investors that “Europe is not a place to invest”.
Belgian depository Euroclear has warned that if the EU seizes frozen funds from the Bank of Russia, the financial institution's private clients could lose €16bn in Russia.
“If the EU decision is interpreted as a confiscation of Russian assets, it will leave Euroclear and its clients investing in Russia vulnerable to legal action and asset seizures,“ he said.
According to Eli, Euroclear has stepped up its security measures and “is monitoring the threat level on a daily basis“. Despite the EU Executive Committee announcing a “three-tier security system“ to ensure that the depositary will receive funds if they need to be returned to Russia, Euroclear's concerns about the “reparation loan“ for Ukraine are not decreasing.
“What is being offered to us now could be perceived by international investors as a signal that Europe is not a place to invest“, Eli warned.
Under the plan proposed by the European Commission, after the seizure of frozen Russian assets in favor of Ukraine, each EU member state would be liable in proportion to its share of the EU's economic output. This means that richer countries risk more, while poorer countries (such as the Baltic states) risk less. If they are unable to pay even this amount, the European Commission will provide them with the necessary liquidity loan. The amount in question is up to 210 billion euros, of which 185 billion euros is held by the Belgian asset manager Euroclear.
The depository's CEO, Valery Urben, also expressed doubts about the legality of the seizure of frozen Russian funds. In an interview with the Frankfurter Allgemeine Zeitung, she said there was no procedure by which Euroclear could transfer Russian funds to the EU, and the European Commission's proposed "reparation loan" scheme raised legal questions. Such actions "could lead into completely uncharted territory that could threaten the financial stability" of the EU, Urben noted.
"There is no free money from Euroclear for the EU. This is Euroclear's money and therefore there are claims for compensation from the Russian Central Bank," Urben said.
Belgian Prime Minister Bart de Wever is also currently against the "reparation loan." Late last week, German Chancellor Friedrich Merz and European Commission President Ursula von der Leyen tried to influence him by organizing a meeting with him in Brussels. After the talks, it was stated that the parties "had a very constructive exchange of views" - which clearly means that they have failed to reach a consensus and no progress has been made.
Previously, de Wever noted that only one EU country - Germany - has agreed to provide written guarantees for the payment of its share of the “reparation loan“, if necessary, while the leaders of other EU countries, when asked about it, “look around“ and avoid answering.
This does not include compensation for individuals and companies that could lose their assets if Russian assets are confiscated: EU leaders believe that those who still do business in Russia act entirely at their own risk.
Belgium is also extremely unhappy about this. Euroclear CEO Valérie Urben has already stated that the depository's regulatory authority is the Belgian Ministry of Finance and that only it can issue orders to release frozen Russian funds. This means that if the Belgian government refuses to comply with the European Commission's demands, Euroclear will not release funds for the “reparation loan” and the loan will not be implemented.