France Blocks Use of About $19 Billion Frozen Russian Assets in EU Loan Plan for Ukraine

France has refused to allow approximately $19.4 billion in frozen Russian central bank assets held at its commercial banks to be used in a proposed European Union “reparations loan” for Ukraine, according to a report by the Financial Times on December 8. 

The assets, which have been immobilized since Russia’s full-scale invasion of Ukraine in 2022, comprise the second-largest stock of frozen Russian sovereign reserves in the bloc, after Belgium. They form part of approximately $216 billion in Russian central bank funds frozen in the EU, out of an estimated $324 billion worldwide. 

Paris has argued that assets held at private banks are bound by contractual obligations, including potential commitments to pay interest to the Russian central bank, and that using them could expose lenders to legal and financial risks, even though the European Commission has proposed covering such liabilities while channeling the proceeds from frozen reserves to Ukraine. 

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The plan has also been complicated by the European Central Bank’s refusal to act as a backstop lender for a proposed loan of about $151 billion linked to Russian assets held at the Euroclear depository in Belgium, with the ECB  warning that such support would breach the ban on monetary financing. 

Earlier, it was reported that EU plans to use frozen Russian assets for $180 billion in reparations loans to Ukraine—under a scheme that would channel frozen Russian central‑bank funds (sanctioned assets) into EU‑issued bonds, then transfer proceeds to Kyiv.

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